Preamble

The House met at half-past Two o'clock

PRAYERS

[Mr. SPEAKER in the Chair]

PRIVATE BUSINESS

STANDING ORDERS (PRIVATE BUSINESS)

The Chairman of Ways and Means (Mr. Bernard Weatherill): I beg to move,

That the Amendments to Standing Orders relating to Private Business hereinafter stated in Schedule (A) be made and that the new Standing Order relating to Private Business hereinafter stated in Schedule (B) be made.

SCHEDULE (A)

(Amendments to Standing Orders)
Standing Order 1, line 77, leave out '1889' and insert '1978'.
Standing Order 1, line 105, after '59', insert 'and 152'.
Standing Order 5, line 31, at end insert 'and (e) where it is proposed by the bill to stop up or divert any specified public foot-path or bridleway, a general description of that foot-path or bridleway'
Standing Order 39, line 10, leave out 'the Department of Prices and Consumer Protection'.
Standing Order 39, line 36, leave out 'Parliament Street' and insert 'Whitehall'.
Standing Order 39, line 38, leave out 'in'.
Standing Order 51, line 6, after 'foot-path', insert 'or bridleway,'.
Standing Order 146, leave out lines 1 to 10.
Standing Order 209, line 4, after 'clock' insert 'or, on a Friday, between half-past nine o'clock and three o'clock).'.

SCHEDULE (B)

(New Standing Order)
'Posting of notices in case of stopping up, etc., of public foot-paths or bridleways.
12A.. In the case of a Bill whereby it is proposed to stop up or divert any specified public foot-path or bridleway, not later than the twentieth day of November notice of the proposal shall be displayed in a prominent position at the ends of the part of the foot-path or bridleway proposed to be stopped up or diverted'.

I should tell the House that the only substantial alterations made by the amendments are to bring the permitted

hours for the deposit of documents in the Private Bill Office into line with the new hours of the sitting of the House on a Friday and to ensure that, when there are Bills by which it is proposed to stop up or divert foot-paths, people are properly informed by notices in newspapers and on the foot-paths themselves.

I thank the hon. Member for Stockport, North (Mr. Bennett) for bringing the latter problem to my attention. The rest of the amendments make minor changes to Standing Orders since the last amendments in 1975.

Question put and agreed to.

Oral Answers to Questions — ORAL ANSWERS TO QUESTIONS

Mr. Speaker: I do not want to sound too optimistic, but I appeal for brief supplementary questions.

SCOTLAND

Health Education Unit

Mr. Allan Stewart: asked the Secretary of State for Scotland whether he proposes to make any changes in the activities of the Scottish health education unit.

The Under-Secretary of State for Scotland (Mr. Russell Fairgrieve): It has been decided that the functions of the Scottish council for health education and the Scottish health education unit should be combined in one new organisation within the common services agency. The detailed implications of this change are being discussed with interested bodies.

Mr. Stewart: I thank my hon. Friend for that most helpful reply. Is he not aware that there is considerable public concern about the way in which this unit has subjected the Scottish people to an endless barrage of propaganda on all sorts of weird and wonderful subjects? As the most likely result of this tedious do-goodery will be that enraged taxpayers will get apoplexy, will the Minister assure the House that in future this unit's activities will be subjected to both common sense and cost efficiency?

Mr. Fairgrieve: I am aware of the worries that my hon. Friend has mentioned. I am, therefore, looking


carefully at a new management structure for the combined body and methods of monitoring its future activities.

Mr. Robert Hughes: Has the Minister said that he has decided to merge the units? If so, why is he only now discussing the detailed implications? Why not have the discussions before deciding what to do?

Mr. Fairgrieve: I have already had discussions about the merging of these two units, which is agreed on both sides.

Mr. Bill Walker: Does not my hon. Friend agree that the film "Are We Being Conned?" leaves much to be desired? It is very misleading and very biased in parts and should not have been presented as it has been.

Mr. Fairgrieve: I took the trouble to see the film my hon. Friend mentioned. All views on films of an educational nature are subjective. However, I agree that in certain respects this film may have cast aspersions on the advertising profession. But my hon. Friend's points have been noted and will be considered carefully in the future.

Mr. George Robertson: Will the Minister ignore the nit-picking from the Government Benches and recognise that the Scottish people expect the Scottish health education unit to continue and increase the advertising against the dangers of alcohol and smoking to compete with some of the heavy advertising we get from both those industries encouraging their use?

Mr. Fairgrieve: I accept the ideas behind the hon. Gentleman's question—but I should mention that Scotland, which has the worst health record of any country in Western Europe, at present spends 0· per cent. of its total health expenditure on health education.

Trades Union Congress

Mr. Maxton: asked the Secretary of State for Scotland when he intends next to meet with the general council of the Scottish Trades Union Congress.

The Under-Secretary of State for Scotland (Mr. Alexander Fletcher): My right hon. Friend and I have met representatives of the Scottish Trades Union Congress several times since taking office and

have made it clear that we are prepared to meet them at any time they wish.

Mr. Maxton: In view of the recent statement by the general secretary of the STUC that he believes that his telephone has been tapped, will the Minister, when he next meets the STUC, give that body an assurance that not only has the telephone of the general secretary not been tapped but that the telephones of other members of the STUC have not been tapped illegally by security services personnel or anyone else? If the Minister cannot give the STUC that assurance, will he inform the House this afternoon what possible reasons there can be for tapping the telephones of hard-working, honest people who do their best for this country? Will he also state—[HON. MEMBERS: "Too long."] Will he also—[Interruption.]

Mr. Speaker: Order. I do not want to tap the line of the hon. Gentleman, but his supplementary question was a bit long.

Mr. Fletcher: I have to inform the hon. Gentleman that that is a matter for my right hon. Friends and not for me.

Mr. Sproat: In the light of the steel strike, what discussions has my hon. Friend had with the STUC about secondary and flying pickets against premises of companies engaged in the oil business? Is he aware that threats to these premises by secondary picketing now threaten very grave delays to important oil contracts? What estimate has he made of the latest situation?

Mr. Fletcher: My right hon. Friend and I have not discussed this particular matter with the STUC, but we have noted the points that my hon. Friend has made and, of course, we are monitoring in Scotland the full effects of the steel strike and, clearly, the damaging consequences that it is having for employment prospects in Scotland.

Mr. James Hamilton: When he next meets the general secretary of the STUC, will the hon. Gentleman forget about secondary picketing and deal with a matter which has caused a great deal of concern in Scotland—the unemployment situation? Will he himself, as the so-called Minister responsible for industry, tell us what he intends to do, bearing in


mind all his utterances when he was in opposition?

Mr. Fletcher: My right hon. Friend and I are doing a very great deal to try to alleviate Scotland's unemployment problems. I am sure, Mr. Speaker, that you would not like me to take up the time of the House now by listing the measures we are taking. We are fully aware of the very serious problem that we inherited from the Labour Government, and we are doing everything possible to try to make things easier for those who, unfortunately, find themselves unemployed at present.

Mr. Gordon Wilson: When meeting the STUC next, will the Minister take on board the pressing comments made by the CBI in Scotland about the state of the economy? After the meeting with the STUC, will he go back to the Chancellor of the Exchequer and tell him plainly that he is engaged on a disastrous course which will increase unemployment in Scotland to well above the 200,000 mark which we have now reached?

Mr. Fletcher: I can only repudiate the hon. Gentleman's very tortuous question and the points that he tries to make.

Mr. Lang: When my hon. Friend meets the STUC, will he draw to its attention the decision in the High Court yesterday that the political levy may now be paid to the Conservative Party as well as to the Labour Party, thus enabling those many thousands of trade unionists who voted Conservative now to contribute?

Mr. Fletcher: Like my hon. Friend, I shall be delighted if those trade unionists who vote Conservative in very great numbers, and in increasing numbers, now find that they are able to contribute to the Conservative Party's finances.

Mr. Harry Ewing: If the Minister is so concerned about what he describes as the damaging effects that the steel strike is having in Scotland, why does he think that the Secretary of State for Industry and the Prime Minister deliberately provoked the strike?

Mr. Fletcher: That is an extremely childish comment, coming from a member of the previous Government, who managed to double unemployment in Scotland during their term.

Skillcentre (Inverclyde)

Mr. Buchan: asked the Secretary of State for Scotland whether he will pay a visit shortly to the skillcentre in Inverclyde.

Mr. Alexander Fletcher: My right hon. Friend has at present no plans to do so.

Mr. Buchan: The right hon. Gentleman did have some plans to do so. Is the Minister aware that the suggestion that this skillcentre should close is one of the silliest and meanest of all the silly and mean decisions made by the present Government? Is he not aware of the high unemployment figure there? The whole community recognises the importance of a retraining programme. Closure would mean about 1,400 young people in the area remaining without jobs and without proper training. Will the Minister reconsider the whole nonsense of the Government's attitude towards skillcentres in Scotland and in Britain?

Mr. Fletcher: The future of the Port Glasgow centre is under consideration by the Manpower Services Commission. The intention is not to reduce the number of training places in the area but to ensure that the location of each centre corresponds to the demand for training places. The hon. Gentleman should know that only one-third of the places at Port Glasgow are filled by people who reside in the Inverclyde area. He should also know that the MSC is not planning to reduce the number of places overall in the area but to try to make the locations of the training centres more suitable for the demand that is there.

Mr. Allan Stewart: My hon. Friend is absolutely right. Does he agree that it would make a lot more sense to concentrate scarce resources at the excellent centre at Hillington and possibly provide subsidiary facilities at Barrhead?

Mr. Fletcher: Certainly the MSC is looking at the whole Glasgow area. I cannot say anything about Barrhead in particular, but I can say that the BSC is planning to build a new centre in Rutherglen.

Mr. Lambie: Is the Minister aware that my hon. Friend the Member for


South Ayrshire (Mr. Foulkes) and myself visited the skillcentre at Irvine on Monday, and, although it is not on the list of skillcentres to be closed, we were told that the proposed new building had been delayed? Will the hon Gentleman give a guarantee that he will ensure that the MSC gives the go-ahead to the new building at Irvine, in view of the fact that it will help not only the Members of Parliament for Kilmarnock, South Ayrshire and Central Ayrshire but also the Secretary of State for Scotland?

Mr. Fletcher: I shall be glad to take note of the points made by the hon. Gentleman.

Mr. Millan: Since training and retraining are, however, recognised to be at the heart of the unemployment problem in Scotland, and as unemployment is now over 200,000, and rising rapidly, how can it possibly make sense to close, for example, the skillcentre at Port Glasgow, which is in an area with a long and very serious unemployment problem? Surely this kind of nonsense ought to be reconsidered and these decisions ought to be rescinded?

Mr. Fletcher: The right hon Gentleman knows all about high unemployment figures. [HON. MEMBERS: "Oh."] However, concerning the skillcentre at Port Glasgow, I assure him that the number of places available in the Glasgow area generally is not being decreased, but the MSC feels that it could make a better disposition of the resources available to it. That must be in the interests of people seeking training places in the area.

Mr. Buchan: On a point of order, Mr. Speaker. In view of the totally unsatisfactory nature of the answer that I have received, I beg to give notice that I shall seek an early opportunity of raising the matter on the Adjournment.

Police Interviews (Tape Recording)

Mr. Peter Fraser: asked the Secretary of State for Scotland if he will make a statement on the progress of the trial use of tape recorders in police stations in Scotland.

The Under-Secretary of State for Scotland (Mr. Malcolm Rifkind): The experiment has begun. Police officers are being trained on the equipment provided.

Necessary building alterations to police stations have almost been completed, and guidelines have been drawn up for the conduct and monitoring of the experiment. The recording of actual interrogations of suspects will commence shortly.

Mr. Fraser: I am grateful to my hon. Friend for that answer. However, in view of the importance that the Thompson committee gave to the linking of proposed police powers of detention with the tape-recording of any proceedings within police stations, before this House considers the criminal justice Bill will some sort of report be laid before Parliament so that hon. Members can assess how important it is to have these matters tape-recorded?

Mr. Rifkind: We shall certainly try to give such information as it becomes available on the success of the experiment. My hon. Friend will be pleased to know that the implementation of tape-recording, if the experiment proves successful, will not require legislation. Therefore, it is not absolutely essential that it be included in the Bill.

Mr. Dewar: Will the Minister give an undertaking that he will not implement the increased police powers of detention, and the interrogation that would follow from them, until tape-recording in police stations is available? Will he recall that in connection with that, the present Solicitor-General for Scotland, then acting on the Opposition Front Bench on the previous Criminal Justice (Scotland) Bill, gave some favourable notice to the suggestion that that part of the new Bill, if and when it becomes law, should not be implemented until tape-recording is available?

Mr. Rifkind: We are also anxious to see whether these tape-recording experiments will work, but I cannot give that particular assurance to the hon. Gentleman. The question of detention and the question of tape-recording are two separate issues. We shall consider each on its own merits. We hope that both will be implemented if the experiment proves to be a success.

Fish Processing Factories (Aberdeenshire)

Mr. McQuarrie: asked the Secretary of State for Scotland when he proposes


to visit the fish processing factories in East Aberdeenshire.

The Secretary of State for Scotland (Mr. George Younger): My noble Friend the Minister of State has visited factories in the area in recent months and I intend to do so myself during my forthcoming visit to the North-East.

Mr. McQuarrie: I thank my right hon. Friend for that reply. Will he endeavour to visit the area within the next month, bearing in mind the fact that at Peterhead last Saturday over 600 people connected with the fishing industry attended a crisis meeting because their livelihoods were at stake? It is absolutely essential that my right hon. Friend should see the situation at the very earliest possible moment.

Mr. Younger: I thank my hon. Friend for what he has said and for the account that he gave me of that important meeting. I shall, of course, try to visit these places as quickly as I can, and I shall keep in touch with my hon. Friend about possible dates.

Fishing Industry

Mr. Sproat: asked the Secretary of State for Scotland when he expects next to meet representatives of the fishing industry.

Mr. Younger: I meet representatives of the industry frequently and will continue to do so, as the need arises. I certainly expect to meet them before the next Council of Fisheries Ministers.

Mr. Sproat: Does my right hon. Friend accept that the fishing industry is going through the worst crisis that anyone engaged in the industry can remember? Does he further accept that one major factor in the crisis is that, while the British fleet is cripplingly restricted in the fish it can catch and where it can catch them, foreign fish are flooding the country both on the quayside and in the inland markets? What consideration is he giving to the bringing in of import controls on subsidised foreign fish?

Mr. Younger: I agree with my hon. Friend that there is grave concern throughout the industry. I have promised the industry that I will do all I can to find out if there is any evidence of foreign supplies being dumped in our markets. I

have the support of my right hon. Friend the Secretary of State for Trade in that matter. I assure my hon. Friend that we are keeping the matter under close watch and we shall do what we can to help the industry.

Mr. Grimond: Let me give the Secretary of State some evidence. Does he know that 180 boxes of prime white fish were unsold at Lerwick yesterday? It is suggested that that was due to imports and I hope that the right hon. Gentleman will look into that matter.

Mr. Younger: I thank the right hon. Gentleman for that information, and I shall certainly follow it up.

Mr. Strang: Does not the Secretary of State recognise that the time for looking for evidence and information has long since passed? If the Government do not take urgent action, the inshore industry will be decimated in much the same way as much of the distant fleet has been in recent years. Will the right hon. Gentleman assure the House that there will, before the end of the month, be a statement on Government action?

Mr. Younger: I am sure that the hon. Gentleman knows from his experience that the collection of information is essential if we are to take action against foreign subsidies or dumping. He will also know that the most important thing for the fishing industry is to have a common fisheries policy which is acceptable to the industry. We are putting all possible skill and energy into providing that as soon as possible. In the meantime, I have promised the industry that I will look at all the suggestions that it has made. I make that promise to the hon. Gentleman as well.

Mr. Pollock: In view of the general crisis facing the Scottish industry and, in particular, the problems of the shellfish sector, will my right hon. Friend tell the House whether he has given any consideration to the possibility of imposing a quota on scampi fishing?

Mr. Younger: One difficult matter, as my hon. Friend knows well, is that as fishing opportunities become fewer the existing fleet crowds into the restricted space and it becomes more difficult for all species of fishing. We will have that aspect uppermost in our minds in


negotiating a common fisheries policy agreement.

Mr. Robert Hughes: Will the right hon. Gentleman tell us when consultations will begin with the fishing industry and all the interests in it on the new body which is to supersede the White Fish Authority and the Herring Industries Board? Although it has been announced that there is to be a merger of the two bodies, the fishermen allege that no consultations have taken place with them, either on the role of the new agency, its membership or how it should be funded.

Mr. Younger: The fishermen can be assured that no decisions will be taken on the matter until consultations have taken place with them. I hope to get those consultations under way within the next month or two.

Several Hon. Members: rose—

Mr. Speaker: Order. This matter comes up again.

Unemployment (Berwickshire and East Lothian)

Mr John Home Robertson: asked the Secretary of State for Scotland if he will make a statement on the latest unemployment figures for Berwickshire and East Lothian.

Mr. Alexander Fletcher: On 10 January, 905 people were registered as unemployed in East Lothian and 211 in Berwickshire—excluding the Gordon district for which separate figures are not available. Those figures are a welcome decrease over the level in January 1979, when the figures were 941 and 277 respectively.

Mr. Home Robertson: In view of the fact that all parts of my constituency still have unemployment rates that are significantly higher than the United Kingdom average—particularly in view of the fact that the Tranent area has an unemployment rate in excess of 20 per cent.—will the Minister tell us how bad matters have to be before he will reconsider the decision to scrap our development area status? Will the Minister take urgent steps to ensure that Fleets industrial site will be developed without unnecessary delay?

Mr. Fletcher: The hon. Gentleman is aware that, although the unemployment figures are higher than we should have liked, they range between 5 per cent. and 6·8 per cent. in the areas to which I have referred, compared with the Scottish rate of 8·9 per cent. That is the sort of evidence that decides whether or not an area should receive development area status.

Forth Road Bridge (Toll Charges)

Mr. William Hamilton: asked the Secretary of State for Scotland if, in view of the deteriorating unemployment situation in Scotland generally, he will now remove toll charges from the Forth Road bridge.

Mr. Rifkind: I have no evidence that tolls on the Forth Road bridge have a detrimental effect on employment either in Fife or in Scotland generally. The cost of abolishing the tolls and writing off the debts would have to be borne by reductions in the road building programme elsewhere and I do not propose to introduce legislation to do that.

Mr. Hamilton: If that is not the cause of the terrible unemployment, there must be other causes. Does not the hon. Gentleman agree that I, at least, have been consistent on the matter, no matter on which side of the House I have sat? Does he think that it is an absurd anomaly that one can drive from Brighton right up to Dundee and the only bit of road for which one has to pay is the bit across the Firth of Forth—[Interruption.] I refer only to the problem of Fife. Dundee Members should deal with their own problems. Does not the hon. Gentleman believe that it is time that the absurdity was ended, even if the effects of the charges are minimal as regards unemployment in Fife?

Mr. Rifkind: I remind the hon. Gentleman that major estuarial crossings throughout the United Fingdom have tolls. Indeed, the local authorities agreed on that basis when the bridges were first built. I have asked the Forth joint board what effect on transport would be produced by the abolition of tolls. It suggested that there would be an increase of about 1 per cent. only in traffic. That suggests that the effect is minimal, as I have indicated.

Mr. Henderson: Is my hon. Friend aware that there is also consistency on this side of the House? Conservative Members have long believed that the tolls on the Forth and Tay bridges should be abolished. Does he hold out any hope of the possibility that that will yet be considered at a later stage when there has not been a doubling of the national debt immediately beforehand?

Mr. Rifkind: The tolls were first introduced on the basis that there was a statutory obligation on the joint boards to pay for the total cost of the bridges. If that can be completed within the statutory period, the matter might be reconsidered at that stage. Until the outstand-debt has been paid off—in the case of the Forth bridge, that should be 1994—it is unlikely that any action will be taken.

Mr. Douglas: Does the Minister accept that his party when in Opposition gave an undertaking to abolish the toll, which was welcomed by the present Secretary of State for Scotland? Does he also concede that the total charges on the user have increased enormously? That is the salient point. The Exchequer has no need for revenue from these tolls which are, in effect, extremely costly to take up and detrimental to industrial expansion in my constituency.

Mr. Rifkind: The hon. Gentleman is correct that in 1974 at the general election we said that we would abolish the tolls. He will recall that we lost that general election. The hon. Gentleman will also recollect that in 1979 we made no such pledge and we won that election. He can draw whatever conclusions he wishes from that statement.

Housing (Waiting Lists and Transfer Requests)

Mr. Canavan: asked the Secretary of State for Scotland whether he will make investigations to find out for each housing authority in Scotland the number of people on the housing waiting list and the number of transfer requests.

Mr. Rifkind: No, Sir. Waiting lists can never be a satisfactory method of estimating housing need. The practice of local authorities in preparing and revising their lists varies widely, and I do not feel that an investigation would be of significant value.

Mr. Canavan: Is the Minister aware that the district councils covering parts of my constituency have over 3,000 on their waiting lists and at least as many again on the transfer lists? Will the Minister at least do his homework and find out the facts instead of forcing local authorities to sell off houses with legislation that is based not on fact but on irresponsible doctrinaire blind prejudice?

Mr. Rifkind: If the hon. Gentleman did his homework he would be aware that Stirling district council, which is within his own constituency, is voluntarily selling council houses. Clearly, it has not come to the same conclusion as the hon. Gentleman.

Mr. Ancram: Will my hon. Friend tell the House whether the present system of housing allocation and transfer has helped or hindered the mobility of labour that we need so badly if we are to revive the Scottish economy? Will he also confirm that the proposed legislation before the House will not help that?

Mr. Rifkind: I agree with my hon. Friend that certain aspects of the present rules have inhibited mobility. The Tenants' Rights, Etc. (Scotland) Bill therefore proposes to abolish the residential qualification. That has been widely welcomed by all those concerned with furthering employment and mobility in Scotland.

Mr. Cook: As the Minister does not propose to find out how many people are waiting on transfer lists, how can he presume to order local authorities to sell off every house that a tenant applies to buy? Does not that illustrate once again the unanswerable case for giving local authorities discretion over the number and type of houses that they put on the market?

Mr. Rifkind: As the hon. Gentleman is a former chairman of a housing committee, he should be the first to be aware that a housing waiting list is not necessarily an indication of housing need. Many people who are on the waiting list are simply seeking a transfer to accommodation in an area that they prefer, or to a house more suitable for their requirements. To suggest that all those on a waiting list are homeless, or in urgent need of re-housing is, as I am sure that


hon. Members will agree, a totally false assertion.

Mr. Sproat: Will my hon. Friend spare no effort to get it into the heads of the Opposition that the present Housing Bill will not affect waiting lists? The houses to be sold are already, by definition, occupied by council tenants. Will he make it clear to the Opposition that the Bill will free local authorities to concentrate their energies and resources upon those with the greatest housing need?

Mr. Rifkind: I agree with my hon. Friend. I can give explanations to the Opposition, but I cannot give them comprehension.

Mr. George Robertson: Is it not amazing that, at a time when we are embarking upon a radical alteration to housing policies in Scotland, the Minister has told us that in key areas it is not worth the time of his Department to find out important statistics? Will he tell his hon. Friend the Member for Edinburgh, South (Mr. Ancram) that the statistics that the Minister gave me this week show that there is no argument to suggest that private home ownership increases mobility in council house or private house tenure?

Mr. Rifkind: If the hon Gentleman is interested in all-Scottish figures, he should know that there are more houses than households seeking accommodation in Scotland. The problems involve particular areas. The hon. Gentleman must know that the waiting lists provided by local authorities are subject to totally different criteria in different areas. Therefore, any national figures are of limited value.

Curriculum (Consultative Committee)

Mr. McElhone: asked the Secretary of State for Scotland when last he met the Consultative Committee on the Curriculum.

Mr. Alexander Fletcher: My right hon. Friend has not yet met the committee, but I hope to do so in the near future.

Mr. McElhone: Does the Minister agree that in 1975 we still had part-time education in the West of Scotland, and that by 1979 the Government had

inherited the best pupil-teacher ratio ever known? Is he further aware that the main reason for an increase in teachers at a time of a falling birth rate is to help less able pupils in deprived areas, and to give help to youngsters going into industry? Is it not highly irresponsible that the Minister has called for a cutback of over 2,000 teachers in Scotland before consulting his own advisory body?

Mr. Fletcher: I am sorry if the hon. Gentleman has misunderstood the Government's intentions. He has referred to the excess over agreed standards, including flexibility factors, of teachers in Scotland. That excess particularly affects primary school teachers. The hon. Gentleman, the former Minister responsible for education in Scotland, will be pleased to know that my right hon. Friend the Secretary of State and I have planned an even better pupil-teacher ratio in Scotland next year. As the hon. Gentleman might have wished to say, we are carrying on the good work in pupil-teacher ratios that he was so proud of.

Mr. John MacKay: When my hon. Friend meets the consultative committee, will he discuss the problems of distortion in core curricula of secondary schools, which is caused by the shortage of mathematics and science teachers? Is it not time that local authorities considered making extra payments to teachers of those subjects?

Mr. Fletcher: I agree that this is a very serious problem in Scotland. We could relieve that problem if we paid specialist teachers, such as those for maths and physics, more. However, it is unlikely that the teachers' associations in Scotland, among others, would agree to distinguish between shortage subjects and other subjects.

Mr. Foulkes: As regards the curricula relating to third and fourth years of secondary schools, can the Minister tell us what has happened to the Munn and Dunning reports? Will he also tell us the results of subsequent experiments? How will local authorities be able to implement any improvements in the curricula for third and fourth years if the number of teachers is substantially reduced as a result of the Government's restraint on public expenditure?

Mr. Fletcher: My right hon. Friend made it clear in his first speech to the House as Secretary of State that we would actively follow up the Munn and Dunning pilot studies with a view to introducing a core syllabus at foundation level. Over 60 schools are involved in the experiment. We consider the experiment to be critical for Scottish education and we shall continue to pursue it.

Mr. Henderson: Is my hon. Friend not concerned that the shortage of teachers in key subjects, to which my hon. Friend the Member for Argyll (Mr. MacKay) referred, is further evidence that the educational system is antipathetic to preparing people to work in practical jobs and careers after leaving school?

Mr. Fletcher: Young people often leave school unsure of the value of their experience. I therefore accept my hon. Friend's point. It is important for the syllabus to include recognition of life in industry and commerce generally. It should prepare young people for working life.

Mr. Harry Ewing: As regards the number of teachers employed in Scottish schools, does the Minister accept that there is provision in the rate support grant, negotiated this year, to reduce the number of teachers in Scottish schools by 2,600? Will he answer either "Yes" or "No" to that question? Teachers, parents and pupils are concerned about the damage that he is doing to education in Scotland.

Mr. Fletcher: Obviously, one can budget for fewer teachers when the school population is declining. That is what we did in the rate support grant. However, the pupil-teacher ratio will improve in the coming year as a direct result of the rate support grant settlement.

Education (Tayside)

Mr. Gordon Wilson: asked the Secretary of State for Scotland if he is satisfied with the provision of education in Tayside.

Mr. Alexander Fletcher: Educational provision in Tayside compares satisfactorily with provision in the rest of Scotland.

Mr. Wilson: Does the Minister realise that that answer confirms that his standards for education are, perhaps, just as low as his standards as regards the provision of jobs in Scotland? Does he remember the Adjournment debate last week and his failure to answer my question about the intention of Tayside regional council to phase out 30 posts, supported under Circular 991? Those teaching posts are in areas of deprivation. Does the Minister approve of Tayside regional council's action? If not, what proposals will he make to ensure that the funding of those teachers continues?

Mr. Fletcher: The staff complement of schools essentially concerns the regional authority. The most recent pupil-teacher ratios in Tayside compare very favourably with other areas of Scotland. That is our main guide for the provision of education in Scotland.

Mr. Peter Fraser: Does my hon. Friend recognise that the pilot scheme for schools in Tayside, promoted with the co-operation of teachers, further education lecturers and industry and which will lead to a mathematics course for those considering craft apprenticeships, is of considerable value, given the present skill bottleneck? Will he urge other education authorities to adopt a similar scheme?

Mr. Fletcher: Yes. This is an important scheme. I understand that about 16 schools are involved in Tayside. The regional authority has shown great initiative. I hope that other authorities will take advantage of the experience in Tayside and that they will follow this good example.

Mr. Ernie Ross: When the Minister visits Tayside on Friday, will he discuss with the Tayside regional authority its intentions as regards provisions for primary schools in the West End of Dundee? Will he indicate to the Tayside regional authority the outright opposition of all school councils and parents concerned, to its intentions?

Mr. Fletcher: The hon. Gentleman will be aware that reorganisation in school provision requires the approval of my right hon. Friend. Until such a scheme is submitted to us, it is not wise for us to comment.

Glue Sniffing

Mr. David Marshall: asked the Secretary of State for Scotland, in view of the recent large increase in the numbers of young people known to practise glue sniffing in the east end of Glasgow, if he will take steps designed to solve the problem.

Mr. Fairgrieve: The number of known new cases in that area of Glasgow fluctuates from month to month, but overall the number reported for the first time has declined in the past year. I remain of the view that the problem can be dealt with only by a comprehensive and continuing programme of community health education. In that regard, my Department has issued advice to directors of social work, directors of education, chief administrative medical officers and chief constables.

Mr. Marshall: Will the Minister accept that his answer is unbelievably complacent in view of recent events, which in some cases have involved serious damage to property and even loss of life? Will he assure us that, in spite of public expenditure cuts, more resources will be made available to help combat this serious and growing problem?

Mr. Fairgrieve: In no way are the Government complacent over the problem. Had that been so, we should not have taken the trouble to get in touch with the bodies that I mentioned. Our firm view is that legislation will be counter-productive.

Mr. Pollock: Does my hon. Friend accept that the problem extends far beyond the East End of Glasgow? In spite of his previous answer, is my hon. Friend prepared to undertake to the House that the Government will at least consider legislative measures in the new Criminal Justice (Scotland) Bill?

Mr. Fairgrieve: There are other areas in Scotland besides Glasgow where the habit prevails, but it is more prevalent in Glasgow. Legislation has been considered, but all opinion is that it would be counter-productive.

Mr. Dempsey: Is the Minister aware of reports that the number attending clinics in the East End of Glasgow has risen from 600 to 900, which is a 50 per

cent. increase? That is indicative of the seriousness of the problem. Is he further aware that in the other four areas no figures are kept? Will he consider a much more comprehensive plan of action, in addition to merely providing health education?

Mr. Fairgrieve: I can only repeat that we have been in touch with a number of bodies and individuals and that we are taking the problem seriously. There are 225 new cases in Glasgow out of a total of 46,000 schoolchildren. The Government give high priority to combating the habit. We shall do everything in our power to overcome the evil, but all the advice that we receive is that legislation would be counter-productive.

Lothian Regional Council

Mr. Ancram: asked the Secretary of State for Scotland when he plans next to meet the convener of the Lothian regional council.

Mr. Younger: I met the convener of Lothian regional council and three of his colleagues on 4 February, when I urged them to reduce spending and avoid excessive rate increases in 1980–81, in line with the Government's wider economic and fiscal policies. I have no present plans for a further meeting.

Mr. Ancram: Is my right hon. Friend aware of the contemptuous reactions of Labour councillors following that meeting? Does he accept that that rogue elephant of a council will not desist from its legitimised robbery of the ratepayers of Edinburgh in the proposed massive and unjustified rate increases? As a matter of urgency, will he seek new powers to stop that, if necessary by suspending the council?

Mr. Younger: I sympathise with my hon. Friend and his constituents in view of reports that indicate extremely severe rate increases for the Lothian region. I explained to the councillors why they should act like all other local authorities in Scotland and do their best to contain expenditure. I hope that the council will listen to what I have said.

Mr. Strang: Is it not time that the Secretary of State ended that political charade and admitted that, of the highest rate increase so far suggested in the Lothian region of 25p, 20p is a direct


consequence of the Government's inflationary policies? Furthermore, will he make it clear that he informed the Lothian regional council that the only action he could take against it is to cut Government support, which will result in further rate increases?

Mr. Younger: The hon. Gentleman is aware that the discussions were about saving expenditure. When his right hon. Friend the Member for Glasgow, Craigton (Mr. Millan) was Secretary of State he also tried to impress on Lothian regional council the need to keep down expenditure, but met with no success. I tried to point out to the council that other local authorities in Scotland, whatever their political views, are doing their best to reduce expenditure, but it appears from reports that Lothian region has no such intention. I drew that fact, and the likely severe effects on ratepayers if it did not keep down expenditure, to the council's attention.

Mr. Myles: Will my right hon. Friend take note that Moray district council has announced that it will increase rates by only 1p in the £?

Mr. Younger: I can only congratulate my hon. Friend on what appears to be the good housekeeping of his district council. I believe that, on average, electors in Scotland will find that, if they live in the area of a Conservative-controlled authority, they will have much lower rate increases than in a Labour-controlled area.

Mr. Eadie: When the Secretary of State for Scotland next meets the convener of Lothian region, will he explain to him why the Government have decided to export unemployment particularly to the Lothians? His hon. Friend quoted that policy to me as a consideration in deciding to close the Scottish plant breeding station in my constituency.

Mr. Younger: I appreciate the hon. Gentleman's concern, but the decision was taken for entirely management reasons, in view of the operations involved. I have explained that carefully to hon. Members.

Mr. Lang: Does my right hon. Friend agree that the Lothian regional council and other councils should first seek to

save expenditure in their staffing levels? Will he accept that they would do well to follow the fine example set by Dumfries and Galloway regional council.

Mr. Younger: I am sure that Lothian regional council will be grateful for my hon. Friend's advice. I hope that it will heed that advice as well as my own.

Mr. Cook: Will the Secretary of State accept that the convener of Lothian region is not a rogue elephant but has long and distinguished service in local government, and feels an understandable sense of outrage about the effect of this Government's policies on the services that he has built up? Does the right hon. Gentleman realise that that sense of outrage will be widely felt in local government if he uses his powers over capital allocations in an arbitrary fashion to punish Lothian region because he does not like its politics?

Mr. Younger: On 4 February I made it clear to Lothian region that the last thing I wish to do is take action against any local authority. I promised COSLA that I should take no action without first consulting that body. I very much hope not to have to take action. However, we have to bear in mind the terrible effect of very large rate increases on ratepayers. Councils have a responsibility to think of that, as well as of services.

Mr. Millan: Will the Secretary of State acknowledge that, apart from Lothian, all local authorities in Scotland are making every effort to contain expenditure increases? If so, how does he explain that there will still be massive rate increases in those areas next year? Does he accept that the increases are an inevitable result of Government policies, particularly over the rate support grant?

Mr. Younger: This is not the case. We have no information that there will be massive rate increases in all areas. Some areas, particularly those with Conservative-controlled authorities, do not expect there to be large increases. The right hon. Gentleman and I know better than most hon. Members that the key is to save money on services. Most authorities in Scotland accept that it is possible to do that. We are merely asking Lothian to do the same as other authorities, which is not unreasonable.

Robroyston Hospital, Glasgow

Mr. Michael Martin: asked the Secretary of State for Scotland whether he will make a statement on the sale of land by his Department at Robroyston hospital in Glasgow.

Mr. Younger: Robroyston hospital and the land surrounding it was sold in1977, with entry in May 1978, after extensive advertisement. The price was £410,000, and the only offer was received from the purchaser. An internal inquiry has not disclosed any irregularity in the procedures followed by my Department. I propose, however, to arrange for the Department's actions in this case to be the subject of an independent review, which will also examine whether and how the Departmental procedures might be improved. I will inform the House about the arrangements for this review as soon as possible.

Mr. Martin: Will the Secretary of State accept that that independent review is most welcome? However, is it possible to extend the review's powers to examine local authorities that are involved? Is the Secretary of State aware that there is a great deal of disquiet throughout Scotland over the land deal?

Mr. Younger: I am grateful to the hon. Gentleman for his welcome of the inquiry, which will do best to start with the procedures of the Department. If it throws up any other information no doubt that could be investigated appropriately. If the local authorities require any investigations, it is for them to decide.

Several Hon. Members: rose—

Mr. Speaker: Order. I propose to allow one minute extra, and I shall add it on at 3.30 pm, in order to call one more hon. Member from either side on this question.

Mr. Sproat: Does not my right hon. Friend agree that there was something grossly negligent about the way the Scottish Office handled the matter under the previous Labour Administration? Is it not almost incredible that the Scottish Office sold this land at a cheap rate without having consulted the regional council and without, apparently, consulting the Scottish Development Department about

the likely prospect of re-zoning, which would, and did, massively increase the value of the land? Was not that a serious piece of maladministration by the Scottish Office?

Mr. Younger: I appreciate my hon. Friend's concern about the matter. I am bound to say that the inquiries that I have made so far do not indicate that there was anything amiss in the Departments' procedures. The inquiry that I have now suggested will surely make it clear whether there was anything amiss.

Mr. Millan: May I say to the Secretary of State, as I was the Minister responsible at the time, that I note that his internal inquiry has not brought out any irregularity? May I say also that I very much welcome the independent review?

Mr. Younger: I am grateful to the right hon. Gentleman.

SCOTTISH LAW COMMISSION

Mr. Canavan: asked the Solicitor-General for Scotland when he expects next to meet the Scottish Law Commission.

The Solicitor-General for Scotland (Mr. Nicholas Fairbairn): Neither I nor my right hon. and noble Friend the Lord Advocate at present has any plans to meet the Scottish Law Commission, but meetings are held when and as necessary.

Mr. Canavan: Will the Solicitor-General remind the Law Commission that we have been waiting for almost 10 years for a report of its inquiry into the conduct of warrant sales under the law of diligence?
Will the Government therefore support my Bill to ban warrant sales at least until such time as the Law Commission produces a Bill with acceptable alternative proposals?

The Solicitor-General for Scotland: No, Sir. In 1977, for example, out of 91,666 debt decrees granted, only 285—under 0·3 per cent.—resulted in warrant sales.

Mr. Myles: Will my hon. and learned Friend ask the Law Commission to consider the anomaly that local authorities


can impound property belonging to other individuals on sites such as caravan sites, when rates have not been paid?

The Solicitor-General for Scotland: I shall certainly consider the matter. If the hon. Gentleman cares to write to me on the subject, I shall consider it in greater detail.

Mr. Gregor MacKenzie: Is the Solicitor-General aware that those of us who, unlike himself, are not familiar with the law, feel that the present system of warrant sales mentioned by my hon. Friend the Member for West Stirling-shire (Mr. Canavan) is fair to neither debtor nor creditor? We cannot understand why it is that the Law Commission is taking such a long time—even allowing for the fact that it is a complex matter—to bring about a satisfactory system for debtors and creditors.

The Solicitor-General for Scotland: I understand the right hon. Gentleman's difficulty. The law of diligence is much wider than warrant sales in themselves, and we cannot deal with them separately. If the right hon. Gentleman thinks that he can, in 10 years, revise the whole of the law of diligence better than the Law Commission and the working parties whose members give their diligent application without any cost to public funds, I do not believe that he will be successful.

Mr. Dewar: Will the Solicitor-General consult the Law Commission about legislation on solvent abuse? Despite what was said in an earlier reply, will the Solicitor-General remember that he and two of his colleagues sitting on the Front Bench now voted for an amendment to make the supply of solvents to minors a criminal offence in the last Criminal Justice (Scotland) Bill, and carried the support of the entire Tory side of the Committee? Why was it such a good idea then, and why is it such a bad idea now?

The Solicitor-General for Scotland: I have no doubt that the hon. Gentleman will remember that I was convinced by the argument of my hon. Friend the Member for Edinburgh, West (Lord James Douglas-Hamilton), and voted for it, whereas the hon. Gentleman voted against it, as did other Opposition Members. It hardly lies in their mouths to seek to teach us.

Let me say this, which is important. Solvent abuse is an increasing danger, not only for minors. It is a matter that causes a great deal of criminal activity among minors and others, and is a great danger to the public. We must treat it as a matter of enormous urgency and consider what can be done to prevent it.

SHERIFFS PRINCIPAL

Mr. Bill Walker: asked the Solicitor-General for Scotland if he has any plans to meet the sheriffs principal.

The Solicitor-General for Scotland: I have informal meetings with the sheriffs principal from time to time. I am meeting Sheriff Principal Charles Johnston at Airdrie on 18 February.

Mr. Walker: I thank my hon. and learned Friend for his reply. Will he, when he next meets the Sheriff Principal, consider with him the number of cases that have appeared before sheriffs in which jurors and witnesses have been called and then the accused has pleaded guilty?

The Solicitor-General for Scotland: This is a really difficult problem. I understand that in Edinburgh almost 80 per cent. of accused persons plead at the second diet when represented by solicitors or counsel. In Aberdeen the figure is about 50 per cent.
It is a monstrous imposition on witnesses on jurors. I hope that the legal profession will find a solution and will not abandon its duty in this matter.

Mr. Harry Ewing: Will the Solicitor-General say what proportion of the 80 per cent. and 50 per cent. that he has mentioned are legally aided? Does the Solicitor-General accept that one of the major causes of concern is the number of clients pleading guilty at the second diet, especially in legally aided cases?

The Solicitor-General for Scotland: That is my concern. A large amount of legal aid and public funds is spent because witnesses and jurors are called and the client then pleads guilty at the last moment. I consider that that is a grave abuse. It is something that I wish to prevent. However, we must all remember that it is difficult to persuade a man to be executed before the day of judgment.

LORD JUSTICE GENERAL

Mr. Peter Fraser: asked the Solicitor-General for Scotland when he intends next to meet the Lord Justice General.

The Solicitor-General for Scotland: I shall be meeting the Lord Justice General on Tuesday 12 February. He will be in London for his introduction into the House of Lords on the following day, which I am sure everybody will welcome.

Mr. Fraser: When my hon. and learned Friend meets the Lord Justice General in London, will he raise with him the problem of the cost of waiting days in the High Court in Scotland, which is a considerable burden to the legal aid fund?
Will he consider the introduction in the High Court of Scotland of fixed diets so that public funds on this important matter are largely saved?

The Solicitor-General for Scotland: I share my hon. Friend's concern about the amount of public funds disbursed on waiting days. I understand that counsel receive two-thirds of a day's fee for waiting days. At present, in the High Court when cases are set down there is always a reserve case. It is believed that that saves more money than it costs. I wish to see a great reduction in the expenditure on waiting days.

Mr. Buchan: When the Solicitor-General meets the Lord Justice General, on what clearly will be a very merry occasion, will he explore with him the situation which will arise in Scotland when we have the combination of the powers of detention under the Criminal Justice (Scotland) Bill and the new measures on picketing under the United Kingdom Employment Bill? Does he

realise that the detention of witnesses under the Criminal Justice (Scotland) Bill will bring grave repercussions on an entire picket line? Will he look at this question seriously?

The Solicitor-General for Scotland: First, I do not think that the hon. Gentleman listened. The Lord Justice General is being introduced on 13 February, so 12 February will be a sober day. The 13February will be a merry day. I do not know what his propositions are on 14 February.
As regards picket lines and the detention of witnesses, if the hon. Gentleman reads what was said by my noble and learned Friend in the House of Lords on what the hon. Gentleman calls the detention of witnesses, I think that his conscience, which I know is always heavy, will be relieved.

Mr. Pollock: When my hon. and learned Friend next meets the Lord Justice General, will he take the opportunity of discussing with him the wisdom of extending the oath of faithful administration to those engaged in the administration of justice in Scotland who at present are under no obligation to take it?

The Solicitor-General for Scotland: I am obliged to my hon. Friend for raising that matter. We should understand that all of us owe an oath of fidelity to carry out our service to the community. I think that it would be a very good thing if clerks of courts and others took the same oath as those who serve justice.

Mr. Harry Ewing: Does the Solicitor-General honestly believe that the mere taking of an oath makes an administrator a better administrator?

The Solicitor-General for Scotland: No. But some of us actually keep our word under oath.

RHODESIA

The Lord Privy Seal (Sir Ian Gilmour): With your permission, Mr. Speaker, I shall make a statement on Rhodesia.
The elections are now only three weeks away. Mr. Nkomo and Mr. Mugabe have returned to the country. The political campaign is under way.
Election broadcasts have begun. Each party has been allotted, equal time.
Election supervisors froth the United Kingdom are positioned throughout the country to oversee preparations for the elections. Arrangements have been made to return ballot papers to this country after the poll to set at rest fears that the secrecy of the vote will not be preserved.
The Commonwealth observer team has been in Rhodesia since 24 January and official observers from individual European and Commonwealth countries will arrive shortly.
Arrangements are being made through the usual channels for a small group of parliamentary observers to witness the elections.
Violent incidents continue to cause deep concern, although the numbers of incidents and of casualties remain far below those prevailing before the ceasefire came into force. The two attacks on buses last Sunday were particularly horrifying and distressing examples.
Today, we have heard of attacks on the house of Mr. Robert Mugabe and of one of his party officials. I know that hon. Members will join me in deploring all such attacks.
The great majority of the incidents investigated formally by the Ceasefire Commission have been attributed to Mr. Mugabe's ZANLA forces, several thousand of whom remain outside the assembly places in breach of the agreements.
Patriotic Front military commanders are present at all meetings of the Ceasefire Commission and have accepted these findings. Action has been taken to discipline elements in the auxiliaries who have acted in breach of the agreements.
The principal threat to fair elections comes from large-scale intimidation of

the rural population. In certain parts of the country it has been made impossible for even Mr. Nkomo or Bishop Muzorewa to hold meetings. People have been told that if they, do not vote according to the wishes of a party, the war will continue or they will be killed. This is a matter of great concern.
The parties signed a solemn undertaking at Lancaster House to campaign peacefully and without intimidation. The Governor has invited them to renew that commitment. It is vital that people should be able to make up their own minds about their political future without fear of the consequences.
The Governor has also taken the power to impose limited penalties against any—any—party or its candidates which fails to honour its undertakings.
The return of refugees from neighbouring countries has begun under arrangements co-ordinated by the United Nations High Commissioner for Refugees. It is hoped that all those in Botswana will return before the elections, as well as a high proportion of those in Zambia.
The return of the refugees from Mozambique is also proceeding, though more slowly because of the unsettled condition in the east of the country.
At our insistence, the political detainees held by ZANU in Mozambique have, like all political detainees in Rhodesia, been released.
Road and rail links with neighbouring countries are being reopened. Diplomatic representatives from nine countries are present in Salisbury with six more to follow shortly. An important and positive development has been the introduction of joint patrols by Patriotic Front forces and the police in the vicinity of assembly areas.
Nevertheless, the Governor's task the remaining weeks will be, no easier than it has been up till now But what has been achieved so far by way of giving effect to the Lancaster House agreements represents a much greater advance than many people dared to hope for.
I am sure that the House will join me in paying tribute to the Governor for the determination and fairness that he has shown in dealing with the sensitive


problems and conflicting pressures that I have described.
Against this background of solid achievement, the Government regret that the tone of last week's debate on Rhodesia in the United Nations Security Council was absurdly one-sided and selective. Such polemics can only increase tension and make the implementation of the settlement more difficult.
Machinery already exists in Salisbury for the investigation and redress of grievances, and, as the Security Council has frequently told us, that responsibility is ours.
The Government felt it inappropriate to associate themselves in any way with a resolution that purported to reinterpret the agreements reached with the parties at Lancaster House. The United Kingdom did not, therefore, participate in the vote.

Mr. Shore: I am sure that the whole House will wish to condemn the attacks last night on Mr. Mugabe and one of his leading supporters in Salisbury. It illustrates once again the real dangers to which all African politicians in Rhodesia are exposed today. It also indicates that the dangers that threaten arise from many different quarters and are not to be identified with any one faction or allegiance in that country. It further illustrates the paramount need to make the ceasefire effective and to combat terrorism.
We welcome the progress that has been made and a number of the matters that are recorded in the Lord Privy Seal's statement, but we understand that there are still great difficulties to be overcome in the next three weeks.
We note that the Governor has taken important powers in the new ordinance to which the right hon. Gentleman referred. The use of some of those powers may be unavoidable. However, I suggest that any decision to disqualify a political party, whether nationally or in any of the eight electoral regions of Rhodesia, would be a decision of the utmost gravity and would put in doubt in a dangerous way the validity of the whole electoral process. I certainly hope that every opportunity will be given to the House to comment upon any proposed decision of that kind before it was taken.
We understand the difficulties of the Governor and his small staff. They are

inevitably relying upon an Administration who, by history and tradition, have a view of the future which is not necessarily the view of hon. Members on either side of the House. We understand all the limitations, but it is important that the Governor should not only be impartial but be seen to be impartial in all the things that he does.
I put it to the right hon. Gentleman that it is not sensible for him to be so dismissive of the recent discussion in the Security Council. When all is said and done, all that it was calling for at the end of the day was that we should all observe the Lancaster House agreement to the full. I cannot have it said that there are 15 members of the Security Council, all of whom have some deep-dyed animosity and suspicion directed against this country. That is not so.
I should like to put three brief questions. The right hon. Gentleman referred—this is an important matter—to action taken not only against ZANLA guerrillas who have not legitimised themselves by reporting to their assembly points but against the auxiliaries—a genuine and real problem. The right hon. Gentleman says that some action has been taken. What action? This is important in relation to the building up of confidence.
The right hon. Gentleman referred to the return of refugees. This, again, is an important matter. My information is that there have been extraordinarily protracted procedural delays at the borders, particularly with Botswana. Can the right hon. Gentleman throw any light on this matter and suggest how the problems can be overcome?
I am aware that the political detainees have been released, but the right hon. Gentleman will agree that there are over 2,000 court martial offenders who have not yet been released. There may be difficulties, but there are, surely, ways of accelerating this process. At the very least, in my view, the ICRC should be admitted to them. That would be a reassuring measure in itself. Will the right hon. Gentleman consider releasing them at least to the assembly points? If they are people who have previously belonged to one or other of the Patriotic Front forces, why cannot they be released to the assembly points where the others are gathered?
On the crucial question of the prevention of intimidation and the proper enforcement of the ceasefire, will the Government look again, and get the Governor to look again, at the text of the Lancaster House agreement, with its clear and specific emphasis on the role of the separate armed forces, and how each of them, in the first instance, is to enforce the law? I should like to feel, and I should like him to assure the House, that the right hon. Gentleman is calling upon the different armed forces to enforce the peace and to deal with breaches of the ceasefire in their areas. Will he give the assurance that only if they are unable to do that will he call in those forces who are prepared to obey the Governor's remit?

Sir I. Gilmour: I thoroughly agree with the early part of the right hon. Gentleman's remarks but I regret slightly the somewhat grudging tenor of his later remarks. I should like to take what he said in order.
Of course, we agree that to disqualify a political party would be an act of utmost gravity. That is why the Governor has promulgated the ordinance today that gives him far less draconian and far more moderate powers. For instance, he can prohibit meetings by the party concerned in certain areas where it has breached the agreement, or suspend a candidate from all or part of the campaign, and so on. I agree that the exercise of any of those powers, in itself, would be undesirable, but it is far less undesirable than the systematic intimidation that is at present going on. If there are to be full, fair and free elections, there must be a great diminution of, and an end to, this intimidation. Therefore, the Governor has to take these powers and has to be unflinching in his operation of them.
I regret what the right hon. Gentleman said about the impartiality of the Governor. Of course, he is impartial—

Mr. Alexander W. Lyon: Nonsense.

Sir I. Gilmour: By all men of good will, he is seen to be impartial. He has undertaken this task as a matter of great public service and he is discharging it exactly as one would expect, according to the highest possible standards.
What the right hon. Gentleman said about the United Nations is wrong. A great many allegations have been made that the right hon. Gentleman would not countenance if he read what has been said. He would deplore them more strongly, if anything, than I have done. There are 14 other members. The right hon. Gentleman will be aware that all the Western members gave an explanation of their votes that showed clearly what they thought. Their view of what was going on was far nearer mine than that of the right hon. Gentleman.
The achievements in respect of refugees have been considerable. Nearly 10,000 have already been moved from Botswana. It is hoped that the operation will be completed by 21 February. There are fewer than 2,000 martial law detainees still detained. It would have been fairer if the right hon. Gentleman had said—as I told him earlier—that originally there were over 5,000 martial law detainees. Considerable progress has been made. We hope that further progress will be made, but the right hon. Gentleman and the House will appreciate that there is a considerable security problem. The Governor is reviewing the matter and hopes to let out more, but I cannot promise that all will be let out by the time the election comes forward.
The auxiliaries are, of course, monitored by the monitoring force. When accusations have been made against them, these are investigated. Disciplinary action has been taken, and will continue to be taken, against them if they transgress what they should be doing, but the right hon. Gentleman will appreciate that in many parts they are doing things, such as reopening schools, and so forth, that cannot possibly be open to any form of criticism. If they go too far and engage in intimidation they must be dealt with, like anyone else.

Mr. David Steel: I preface my remarks by welcoming the progress that has been made since the Lord Privy Seal last made a statement. Does he recall that a few weeks ago he was very irritated in this House at those of us who questioned the implementation of the Lancaster House agreement in terms of the removal of South African troops? Will he, therefore, not turn his current irritation against the


Security Council? There must be something deeply wrong when we find ourselves at variance with the United States on the vote. I hope that all this will be put behind us now that the South African troops are removed, and that we shall concentrate on the future rather than blame the Security Council.
According to reports that I have received—I wonder whether the right hon. Gentleman can confirm them—one of the difficulties in the country is the growing scale of independent banditry among groups of people not properly under the control of Mr. Mugabe or Bishop Muzorewa. Can the right hon. Gentleman say whether the monitoring forces are satisfied that they are able to monitor the auxiliaries when they, unlike the guerrillas, are not even required to be, or supposed to be, in particular assembly points?
Will the right hon. Gentleman give a reassurance that it is intended that the Commonwealth monitoring force will remain until after polling day and until the newly elected Government have been formed and properly installed?

Sir I. Gilmour: The date of the monitoring forces' withdrawal has not yet been decided. The auxiliaries are monitored. Plainly, however, there have been incidents where they have been at fault. Otherwise, they would not have been disciplined. They will continue to be monitored.
The right hon. Gentleman is right in saying that there are some bandits about. I do not think that anyone believes that they are the main cause of the trouble.
I am grateful for what the right hon. Gentleman said in welcoming the progress that has been made. As to his remarks about the United Nations, I can only repeat what I said to the right hon. Member for Stepney and Poplar (Mr. Shore). If the right hon. Gentleman reads the debate he will see that he is lining himself up with sentiments with which he could not possibly agree. It is for the American Government to explain their vote. I should, however, point out that both the American and the French representatives made strong statements of support for the Governor's efforts and endorsed our view that the resolution could not be treated as a

reinterpretation of the Lancaster House agreement.

Mr. Amery: Can my right hon. Friend confirm that between 4,000 and 5,000 of Mr. Mugabe's guerrillas are still operating inside the country and that a similar number of Mr. Nkomo's guerrillas are under arms on the Zambian side of the frontier? Is he aware, following upon the disqualification question raised by the right hon. Member for Stepney and Poplar (Mr. Shore), that there is a growing feeling inside Rhodesia, among blacks as much as, if not more than, whites, that the Government are embarking upon a public relations exercise over the elections to get us off the hook? Will he refute that calumny and make clear that we shall support the Governor in every way possible to ensure that the letter and the spirit of the Lancaster House agreement are observed?

Sir I. Gilmour: I said that there were several thousand ZANLA guerrillas about. It is impossible to make an exact estimate of their numbers, but I have no reason to believe that my right hon. Friend's estimate is particularly inaccurate. As to the ZIPRA forces, I do not know the answer. They have co-operated very well in the ceasefire and with the Governor, and we have no complaints against them.
I did not know that it had been put out that we were engaged in a public relations exercise. It is hardly worth refuting the calumny. I certainly welcome the opportunity that my right hon. Friend has given to say that we shall carry out the Lancaster House agreement to the full, and that we shall ensure that there are free and fair elections in Rhodesia.

Mr. Alexander W. Lyon: Does the Lord Privy Seal not agree that when the entire Security Council takes a different view from Britain about what is going on in Rhodesia it creates some uncertainty for us about his assurance that nobody is in any doubt about the Governor's impartiality? Would it not reinforce that impartiality if we were to end martial law, let out the martial law prisoners, who are detained only because they were involved in the fighting, and keep the auxiliaries in barracks, just as the Patriotic Front forces are kept in their assembly areas?

Sir I. Gilmour: No one could accuse the hon. Gentleman of inconsistency in


these matters. I think that he would certainly have fitted very well into the United Nations debate. However, if only he would read that debate even he would be shaken by what was said, and he would also realise that to say that 14 members of the United Nations were agreed against us is sheer rubbish.
It would be impracticable to free all the martial law detainees. More than half have already been freed. It is right that the auxiliaries should be closely monitored, and they are, but the idea of returning them to barracks is not practicable.

Mr. Cyril D. Townsend: At a time when the cool courage of the British and Commonwealth troops is being praised on all sides, will my right hon. Friend give the most careful consideration to arguments in favour of withdrawing those forces before the final election result is known, since many feel that otherwise they will be in a perilous position?

Sir I. Gilmour: As I have already said, we have not yet decided on the exact date of withdrawal of the monitoring force. I am glad to hear what my hon. Friend said about it. It is universally agreed that its behaviour has been marvellous. Very small detachments brought in large numbers of guerrillas, and those detachments behaved with considerable courage and great skill and impartiality. I know that the whole House will want to pay tribute to them.

Mr. Dalyell: Towards the beginning of his statement the Lord Privy Seal referred to observers from individual European countries. What is their locus and their function?

Sir I. Gilmour: Their locus is that they are representatives of European countries. They will be observing the elections.

Mr. Emery: Does my right hon. Friend accept that only the most biased person would question the independence and impartiality of the Governor? In order to deal with matters of intimidation, has not legal action been taken in respect of a considerable number of instances and court sentences passed on those found guilty?

Sir I. Gilmour: I entirely agree with my hon. Friend. The House should realise that not just Bishop Muzorewa

or the internal parties are complaining about intimidation. Mr. Nkomo and his party have also complained. Labour Members should bear that in mind.

Mr. Bradford: What contingency plans have been formulated to meet the possibility, if not the inevitability, that any election result that does not advantage Mr Mugabe's party will not be regarded as valid?

Sir I. Gilmour: I do not think that contingency plans are needed for that. Clearly, however, certain people have made up their minds already. Their definition of a free and fair election is that Mr. Mugabe should win.

Mr. Stanbrook: Last year, in spite of the hostility of the Patriotic Front, an illegal regime managed to hold what many independent observers regarded as free and fair elections. Is my right hon. Friend satisfied that the resources now exist on a similar scale to ensure that free and fair elections will be held under the present regime?

Sir I. Gilmour: I think that the resources are there. They will be very similar, because the same people are involved. However, there have been some worrying incidents, which is why the Governor has taken additional powers today under the new ordinance.

Mr. Robert Hughes: Will the right hon. Gentleman be very careful of his language in this fragile matter? What can he mean by saying that Bishop Muzorewa and the "internal parties" are concerned and that Mr. Nkomo and Mr. Mugabe are also concerned? Both men represent internal parties and have every right to take part in the elections. It is this kind of slight that is continually renewing the problem, especially when severe restrictions are placed on the return of refugees. Males are individually examined and told that they cannot come in because they are guerrillas. Will the right hon. Gentleman therefore confirm that every refugee from Rhodesia is entitled to return to that country as quickly as possible in order to participate in the election?

Sir I. Gilmour: I am sure that the hon. Gentleman's motives are good, but his first point is frivolous. He must know perfectly well that when I refer to the


"internal parties" I mean those that were internal before the Lancaster House agreement. That is what they are called, and that is well known. It is a point too obvious to stress that Mr. Mugabe and Mr. Nkomo are allowed to take part in the election. If that were not so they would not have been allowed to return to the country. The hon. Gentleman does not need to labour matters of that sort.
On the question of refugees, I do not think that the hon. Gentleman has read the Lancaster House agreement. Refugees are allowed to return, although it was made clear that it would be impossible for all of them to return before the election. It was also made clear that guerrillas or former guerrillas would not be allowed to return under the guise of refugees.

Several Hon. Members: Several Hon. Members rose—

Mr. Speaker: Order. I propose to call those hon. Members who have been rising and the Opposition Front Bench spokesman at the end as usual.

Mr. Hastings: Is it not true that the overwhelming proponderance of acts of intimidation so far, including the murders at Rusape last weekend have been the direct responsibility of ZANU/ZANLA? If that is so, is it not the duty of the Government to make that absolutely plain, not only in Rhodesia but in this country and the rest of the world.

Sir I. Gilmour: It is true that of 70 incidents adjudicated on by the Ceasefire Commission, 54 have been ascribed to ZANLA or ZANLA-dominated areas.

Mr. Ioan Evans: To meet the United Nations criticism, would the Lord Privy Seal consider inviting United Nations observers to join the other observers? I welcome the withdrawal of South African troops from Bietbridge, but can the right hon. Gentleman give a categorical assurance that there are no South African troops or mercenaries operating in the country? I want to maintain impartiality, but why is the aged Catholic Bishop Lamont being asked to leave Rhodesia?

Sir I. Gilmour: The bishop has been allowed in. There are no South African units in Rhodesia, but, as we said throughout the Lancaster House conference and since we would not carry out a purge

either of the Rhodesian forces or the Patriotic Front forces. There are South Africans in the Rhodesian forces just as there are Mozambiquans among the Patriotic Front.
As for the United Nations observers, there are already 100 observers of one sort or another in Rhodesia. The behaviour of the United Nations in the debate last week has not reinforced its claim.

Mr. Ian Lloyd: Will my right hon. Friend continue the resistance that he has shown to the pressure being placed upon him by some Labour Members to cast serious aspersions on the important role that the South Africans have played in the defence of Western interests in Southern Africa, including Rhodesia, since, if things go seriously wrong, the South Africans alone will have the power to retrieve the situation?

Sir I. Gilmour: We have been grateful to the South Africans for providing certain materials for the elections. I hope that the South African Government and all neighbouring Governments will continue to co-operate with us.

Mr. Flannery: Does the right hon. Gentleman not realise that the nature of the questions from his fellow Tories and the nature of his answers clearly indicate that the Government are being dragged, kicking and screaming, towards democracy in Rhodesia? Does he not realise, when talking about intimidation, that Mr. Mugabe's relatives and Mr. Mugabe himself have been attacked? Mr. Mugabe was kept out of Rhodesia by the British Government and their biased Governor—who has been condemned at the United Nations—and he and the Patriotic Front have not had sufficient time to campaign. Why are such questions emerging from the Tory Party and why are such answers being given when the Patriotic Front would have returned ultimately despite the South African racialist troops who were operating in that sensitive situation until they were kicked out by the Security Council?

Sir I. Gilmour: There is a great deal of soap-box nonsense about the question of the hon. Member for Sheffield, Hillsborough (Mr. Flannery). It is quite wrong to say that the Governor is biased. When they look back on the United Nations' debate even Opposition Members, who


do not have very high standards in these matters, will not relish the company that they were keeping.

Sir Ronald Bell: Does my right hon. Friend believe that it would be a fine thing if the Opposition in this House was as impartial as the Governor? Does he agree that in promoting thin, second election the Government have taken on a heavy responsibility for ensuring that it is at least as fair and free as the first one? Will he and the Governor not hesitate to use any powers that are necessary to ensure that intimidation does not succeed?

Sir I. Gilmour: I can give that assurance to hon. Friend. I apologise to the hon. Member for Hillsborough, who asked about Mr. Mugabe. Of course I have deplored the attacks on him. Perhaps the hon. Gentleman was not here when I made it clear in my statement that we did deplore it, as we deplore all attacks of that kind. It is worth bearing in mind that part of the reason for the delay in Mr. Mugabe's return to Rhodesia was that he was locking up 71 politicians in Mozambique. We thought that those politicians should be allowed to return to Rhodesia to fight the elections. I hope that the hon. Gentleman approves of that.

Mr. James Lamond: With regard to those bounders in the Security Council who made unwarranted allegations so effectively that they swayed everyone else to vote against us, does the Lord Privy Seal extend his criticism in these matters to any of the 104 members of the General Assembly who voted against the Soviet Union?

Sir I. Gilmour: The hon. Member for Oldham, East (Mr. Lamond) can always be relied upon to put in a plug for the Soviet Union. It should be realised that there are many reasons for casting votes in the United Nations as the members of the Opposition Front Bench are well aware. A vote cannot always be taken at its face value as those same Front Benchers know.

Mr. Myles: Is my right hon. Friend satisfied and confident that the losers in the coming election, whoever they might be, will accept defeat in peace? Is he also satisfied that the forces of law and order that will then operate under the authority of the winners of the election,

whoever they might be, will be able to maintain peace in that lovely country?

Sir I. Gilmour: All these matters were agreed at the Lancaster House conference. They are enshrined in the agreement and we must all hope that all the parties to that agreement will keep their word.

Mr. Ernie Ross: In his statement the right hon. Gentleman spoke of systematic intimidation in Southern Rhodesia and said that he deplored it. In view of the moderate and conciliatory speeches being made by both leaders of the Patriotic Front would the right hon. Gentleman like to deplore the systematic intimidation being carried out by the leader of the Rhodesian Front in his continuing dialogue with South Africa and the threat that that dialogue poses to the result in any election in Zimbabwe?

Sir I. Gilmour: I do not know what the hon. Member for Dundee, West (Mr. Ross) is talking about. I am not aware of the dialogue to which he refers but I and the Government deplore all intimidation, wherever it comes from. The majority of that intimidation is coming from one quarter but all intimidation is thoroughly to be deplored.

Mr. Stoddart: Is the right hon. Gentleman aware that the reply he gave to my hon. Friend the Member for West Lothian (Mr. Dalyell) was completely unsatisfactory? Will he now tell me what is the locus and what are the functions of the independent European countries in Rhodesia?

Sir I. Gilmour: The locus of those countries is much the same as that of countries from other continents. I do not see why the hon. Member for Swindon (Mr. Stoddart), or the hon. Member for West Lothian (Mr. Dalyell) are particularly worried about Western European countries. The United States and other countries have been invited to send observers. Their locus is that they are independent countries and as I have said their functions are to observe.

Mr. Shore: If I may say so, the Lord Privy Seal has been uncharacteristically dyspeptic and ill-tempered throughout the course of our exchanges. His mood has


not been helped by the contributions made from the Government side. We all accept the tribute paid by the right hon. Gentleman to the monitoring force that has played, and is playing, an absolutely crucial role in the ceasefire arrangements. However, is it not the case that Rhodesia is still bedevilled—as the incident referred to and the attempt on Mr. Mugabe's life demonstrate—by bandit groups? I take the phrase from the Leader of the Liberal Party. Those groups are not necessarily part of the main forces of either of the major guerrilla groups. There are elements of the guerrilla groups that have not reported and they are also dangerous.
I put it to the right hon. Gentleman that there is also a danger from at least elements of the auxiliary forces, who, as he knows, are not under the same kind of supervision as other forces in Rhodesia. My question, linked to the tribute already paid to the Commonwealth monitoring force, is whether is is possible to get a modest but necessary reinforcement of the Commonwealth monitoring force into Rhodesia during the next few weeks.
I believe that an additional force of between 600 and 800 Commonwealth military observers could make a substantial difference to the situation. Can the right hon. Gentleman confirm that the return of Bishop Lamont will be unconditional? The bishop is a man who is held in high esteem in Rhodesia, and it would be a great pity if limitations or constraints were imposed on his stay there. I know that the right hon. Gentleman wishes to give as fair a record as possible. Will he therefore say how many charges have been brought against auxiliaries who have been accused of acts of misconduct and ill discipline?

Sir I. Gilmour: I welcome what the right hon. Member for Stepney and Poplar (Mr. Shore) said about the monitoring force and its conduct of events. If any of the auxiliaries behave badly they will be dealt with. I will draw the remarks of the right hon. Gentleman to the attention of the Governor, who, I know, is well aware of all relevant matters. If the Governor requested reinforcements we would seek to get such reinforcements from the Commonwealth. He has not done so. I have no further information about Bishop Lamont. When I have more information I will give it to the right hon. Gentleman.

TELEPHONE TAPPING

Mr. Cryer: On a point of order, Mr. Speaker I ask you to give this matter consideration and rule upon it later, if necessary.
You may recall that on 31 January I asked the Home Secretary about one warrant being used for a multiplicity of telephone tappings The Home Secretary's reply was
I shall take refuge…in saying that it would not be in the national interest for me to make any further comments."—[Official Report, 31 January 1980; Vol. 977, c. 1545.]
The effect of that, Mr. Speaker, following a Select Committee report of 1972, as I understand it, is to prevent any further questions of a detailed nature for a period of three months.
However, on 1 February, in response to a letter from an hon. Member, the Prime Minister wrote a letter elaborating in some slight detail the position relating to telephone tapping by VAT inspectors and other investigative agencies. The letter, which has been widely reported in the press, concluded by saying that law-abiding citizens had no need to fear any of these actions.
I attempted to place further questions, particularly about the number of warrants and the number of tappings, because those questions were not answered but were referred to in the letter that followed the comments of the Home Secretary. I also tried to place questions about the disposal of the tape recordings, but that was also declared to be within the three-month rule.
I think that you, Mr. Speaker, would regard it as undesirable—as I do—if a practice grew up whereby the Government answered questions and provided information by going around Parliament and writing direct to hon. Members. This is particularly so where the Government write to their own Back Benchers. I make no imputation on this occasion, because I am sure that it was done in good faith. Quite obviously, however, if information is diverted around Parliament, it is not placed on the record and it is left to the discretion of the Government and the Back Bencher involved whether it is published. In fact, information could be withheld or presented in a false way, which is not possible to such


an extent in answers to questions, which are subject to scrutiny.
Will you, Mr. Speaker, examine the situation in which letters are published relating to matters that are subject to the three-month rule? Will you consider whether questions can be asked about the letter, provided it is published, and will you consider whether you could treat the interpretation of that letter as generously as possible, bearing in mind that this House should retain some sort of democratic scrutiny of the Executive, particularly as we move towards 1984?

Mr. Speaker: I am obliged to the hon. Member for the way in which he submitted his point of order. He is aware that I had no prior notice and therefore he will not be surprised that I want a little time to read carefully what he said and to study the implications. I undertake to give the House a ruling in the near future.

BEVERAGE CONTAINERS

Dr. David Clark: I beg to move,
That leave be given to bring in a Bill to require all beverage containers to bear a minimum refund and to provide for the prohibition of the use of metal containers with pull tabs.
The world is facing an energy crisis. Everyone is aware of rising energy costs and the terrible world recession. We might argue that part of the cause of the energy crisis is the political instability in the Middle East. But that is a mere bland, superficial analysis. The reason behind the rise in energy costs is the scarcity of supplies. The modern industrial world is very wasteful of energy and of many other resources.
If we look around we see that there are many spheres where waste is so obvious that we almost come to accept it, especially in packaging where in many cases we have taken a step backwards. This is particularly so when we consider the supply of beverages such as beer, cider and soft drinks. Twenty years ago the vast majority of such goods were supplied to the United Kingdom market in the form of returnable glass bottles. Now, however, the use of that most ideal packaging method is being phased out and we are seeing more and more metal cans and non-returnable bottles. This adds up to a considerable depletion of resources, considerable visual pollution, a vast amount of energy consumption and added danger to life and limb.
The aim of my Bill is to correct that situation by requiring that all beers, ciders and soft drinks should be sold in returnable containers with a refundable deposit. This would not prohibit cans, merely those with ringpulls. I have singled these out because they are difficult to recycle, because of the metal mix of which they are made, and because the detached tabs constitute a danger to humans and animals. In fact, all non-returnable containers are a danger. The non-deposit bottle is less likely to be deposited in a safe place, is more likely to be broken and as a result may cut animals and humans. The National Farmers Union is continually worried about the problems of non-returnable packages in all forms.
Glass is the ideal container because it has the advantage of re-use as well as recycling. We have only to look at the milk bottle to see how it has borne the test of time in this country. The dairy industry today still advocates the use of the milk bottle. We should encourage, by legislation, similar use of glass returnable containers in the areas that I have suggested. By doing so we would immediately reduce the litter problem and that of refuse disposal, bearing in mind that 10 per cent. of all domestic refuse is made up of glass or metal containers. At the same time, we would save energy in the cost of production, save on resources and protect environmentally sensitive areas.
Glass is made of two predominant products—basically sand, which comes from the North Downs and part of Norfolk, and limestone which is mined in two national parks, the Yorkshire Dales and the Peak District. Therefore, I am arguing for a package which would save energy and be environmentally desirable.
However, this problem is not confined to Britain. It is international. It has been tackled with more vigour in other countries. In the United States a number of States have legislation along these lines—Maine, Vermont and Michigan, for example. In the EEC, Denmark only last month introduced a ban on the sale of beers and soft drinks in anything other than returnable bottles.
I cite as the best example that of Oregon, simply because the legislation

there has been on the statute book for the longest time. As a result of the Bottle Bill there, the number of jobs increased, prices stabilised, there was an improvement in hygiene, a reduction in litter and resources were saved.
What I am asking for today will be inevitable in the long run. The time is now coming when we must follow certain other countries and give a lead to those that are lagging behind. I realise that I am moving into a sensitive field. The vested interests of big business will undoubtedly favour the staus quo. They have done so in other countries. But this House has never been intimidated by any outside interest. I am sure that on this occasion it will not be so intimidated.

Question put and agreed to.

Bill ordered to be brought in by Dr. David Clark, Mr. David Alton, Mr. Andrew F. Bennett, Mr. Patrick Cormack, Mr. Tam Dalyell, Mr. Selwyn Gummer, Mr. Peter Hardy, Mr. George Park, Mr. John Home Robertson, Mr. David Stoddart, and Mr. James Wellbeloved.

BEVERAGE CONTAINERS

Dr. David Clark accordingly presented a Bill to require all beverage containers to bear a minimum refund and to provide for the prohibition of the use of metal containers with pull tabs: And the same was read the First time; and ordered to be read a Second time upon Friday 7 March and to be printed. [Bill 142.]

INDUSTRY [MONEY] (No. 2)

Queen's Recommendation having been signified—

Resolved,
That, for the purposes of any Act of the present Session to make further provision in relation to the National Enterprise Board, the Scottish Development Agency, the Welsh Development Agency and the English Industrial Estates Corporation, and to amend the Industry Act 1972 and the Industry Act 1975, it is expedient to authorise the payment out of money provided by Parliament of any expenditure incurred by the Secretary of State—
(a) in respect of the acquisition of securities of, the making of loans to, and the guaranteeing of obligations (arising out of loans or otherwise) of any company in which he or his nominee acquires from the National Enterprise Board shares carrying in the aggregate more than half the voting rights exercisable at general meetings of the company, and
(b) in making provision for the giving of advice to persons carrying on or proposing to carry on a business.—[Mr. Newton.]

INDUSTRY BILL

Not amended (in the Standing Committee), considered.

Motion made, and Question proposed,
That the Industry Bill be considered in the following order:—Amendments relating to Clauses Nos. 1 to 18; new Schedules; Amendments relating to Schedule No. 1; new Clauses; Amedments relating to Schedule No. 2; Amendments to the Title.—[Mr. David Mitchell.]

Mr. Robert Adley: On a point of order, Mr. Speaker. You will have noticed that clause 1 and clause 4 cover different subjects. Would it be in order to debate them separately, or, if not, would it be in order to vote separately on clauses 1 and 4?

Mr. Speaker: I think that the hon. Gentleman meant to say amendments Nos. 1 and 4. He referred to clauses 1 and 4. It will be possible to have separate votes on those amendments, but they should be discussed with the first group. However, we are now dealing with the order in which the Bill should be considered. I hope that all hon. Members understand the motion on the Order Paper.

Mr. John Bruce-Gardyne: On a point of order, Mr. Speaker. I wish to raise a similar point to that raised by my hon. Friend the Member for Christchurch and Lymington (Mr. Adley). You have grouped together amendments Nos. 21 and 22 in the names of Labour Members with my amendment No. 24. Since the purpose of amendments Nos. 21 and 22 apparently is to increase public expenditure and the purpose of amendment No. 24 is to reduce it, would it be possible, if necessary, for the amendments to be the subject of separate Divisions?

Mr. Speaker: I suggest to the hon. Gentleman that separate Divisions will be possible, but it will be in the interests of the House to have one debate.

Question put and agreed to.

Clause 1

FUNCTIONS OF THE BOARD AND AGENCIES

Mr. John Silkin: I beg to move amendment No. 1, in page 1, leave out from beginning of line 7 to end of line 25 on page 2.

Mr. Speaker: With this, we shall take the following amendments.

No. 4, in page 1, line 14, at end insert—
'(g) ensuring that, where an individual manufacturing plant is scheduled for closure or for change of use from manufacturing purposes, such plant should be offered for sale, to any buyer who is able to satisfy the Board of his intention and ability to continue the existing purposes.'

No. 5, in page 2, line 18, at end insert—
'(j) to intervene where necessary to prevent the loss of industrial undertakings in Wales as a result of decisions taken by companies outside Wales;'.

Government amendments Nos. 6, 7, 29 and 31.

Mr. Silkin: In a sense, amendment No. 1 is the nub of the Bill. It would effectively remove the whole of the first clause. It is that clause in which the philosophy of the Government may be observed.
The clause does four things. First, it prohibits the National Enterprise Board and the agencies from promoting any industrial reorganisation. Secondly, it also prohibits the introduction and the


promotion of industrial democracy by the National Enterprise Board in any concern in which it might be interested. Thirdly, it forces the National Enterprise Board and the agencies to dispose of assets which they may hold to the private sector. Fourthly, it stops the National Enterprise Board from exercising its previous function, given to it by the Industry Act 1975, of extending public ownership into profitable areas of manufacturing industry. As I said, this is really the philosophical nub of the Bill.
When one looks at the speeches of the Secretary of State on Second Reading and of his hon. Friend the Under-Secretary of State in Committee, one finds that very little justification is given for the omission of these various items, except that they are contrary to the philosophy of the Government. What, then, is the philosophy of the Secretary of State? He has told us many times that it is
non-intervention in day-to-day management, and creation of an economic climate where industry can prosper.
The Government have been in office for nine months, a sufficient period of gestation to see exactly how the economic climate is being made to prosper. One of their first measures was to abolish exchange controls, so that money which could be used for investment here is now free to go abroad, and is doing so at an alarming rate.

Mr. Nick Budgen:: After nine months of the previous Government's taking office in February 1974, did the right hon. Gentleman accept responsibility for everything that was happening to the British economy?

Mr. Silkin: The Government of the day were the Government of the day. I am dealing with the present Government's philosophy and attitude.

Mr. Budgen: Answer the question.

Mr. Silkin: I am answering the question. The hon. Gentleman asked me whether I would accept responsibility. I said that the Government of the day accept responsibility, or that they should accept responsibility.

Mr. Budgen: Perhaps I did not make my question clear. I asked the right hon. Gentleman whether he and the last Government

accepted responsibility for everything in the economy as from nine months after February 1974.

Mr. Silkin: The Government of the day accepted responsibility for their actions, and the present Government should accept responsibility for their actions. If the hon. Gentleman will listen to me, I am about to remind him of those actions. I had started to do so when he interrupted. I reminded him—perhaps he did not know or perhaps he was not told—that one of the main actions of the Government was to abolish exchange control. I added that the effect of that was to cause large sums of money to leave the country. The hon. Gentleman should read the Financial Times occasionally. He must increase his reading beyond his own column in the Sunday Telegraph.

Mr. Bruce-Gardyne: The right hon. Gentleman should read both the Financial Times and the Sunday Telegraph. He might discover that, far from money flowing out of the country, it has been flowing in on a massive scale—completely the reverse of what he has been saying.

Mr. Silkin: Both could be true. Money could come into the country in the form of shareholdings, but money could leave the country. I quoted from the Financial Times, which reported on the first two months of the operation. The interesting point about that report—the hon. Gentleman can no doubt write a good article on it in next Sunday's Sunday Telegraph—is that it showed that the amount of investment that had left Britain was greater than the £1,000 million that the Prime Minister is presently trying to cut down on or get squared off in her discussions with our partners in the EEC. I suggest that the hon. Gentleman reads back to the Financial Times of October or November, and he will see that I am right.
My second point is about the artificially high rate for the £ sterling, a basis which inevitably has its effect upon our exports. It is true that it makes imports cheaper, but in a hard competitive export market it has had the effect of hurting our exports.
My third point is the increase in minimum lending rate to 17 per cent. The effect of that is that small businesses in particular will be borrowing money at 20 per cent., 21 per cent. or sometimes even 22 per cent. Conservative Members


are supposed to be concerned about small businesses. The high interest rate, which we were told five or six months ago would be temporary, now begins to look far too permanent for the health of most businesses. To cap it all, we have the first national steel strike for 53 years.
That is the result of nine months of Conservative Government and the Secretary of State's philosophy. Whenever we tackle the right hon. Gentleman, he says "We are leaving the economic climate alone and we are leaving day-to-day management to the industries concerned." He parades for our inspection a bleeding heart on behalf of what he calls the long-suffering taxpayer.

I am not sure what the right hon. Gentleman means when he refers to the long-suffering taxpayer. In a sense, every man, woman and child in this country is a taxpayer, since everything that is consumed, with the exception of food, bears some form of tax. Does the right hon. Gentleman mean the whole community—he does not say that—those paying income tax or perhaps those paying higher rates? There must be some distinction in his mind.

If the right hon. Gentleman means the standard rate taxpayer, I have to point out that if unemployment increases, especially through the right hon. Gentleman's policies, he is not assisting the long-suffering taxpayer but reducing the number of taxpayers. I suppose that that is one way of getting them out of their misery, but it is not the virile national economy that the Under-Secretary advocated so keenly in Committee.

Of course, the right hon. Gentleman's action should have been foreseen. In his memoirs, Sir Winston Churchill said that when he assumed office in 1940 he realised that all his past life had been only a preparation for that moment. The same may be true of the Secretary of State for Industry in his own sphere. As Minister of Housing and Local Government, the right hon. Gentleman reorganised housing and the result was the tower blocks that we can see all over the country. They are the curse of urban dwellers and the right hon. Gentleman admits that he is ashamed that he built them.

Mr. Eldon Griffiths: They were built by local authorities.

Mr. Silkin: Yes, but the hon. Gentleman knows that they were built with his right hon. Friend's encouragement. The hon. Gentleman became a Member a short time after I was elected. Part of my maiden speech dealt with the tower blocks, and the hon. Gentleman will remember the then Government's expensive site subsidy which was designed to produce tower blocks.
When the right hon. Gentleman held office in the 1970–74 Conservative Government, he reorganised the National Health Service, which had an effect on the health of patients, the bureaucratic control of the NHS and the misery inflicted by the reorganisation through administrative delays and the appalling way in which the matter was dealt with. That had its effect on the misery of patients, just as the tower block policy had its effect on the misery of flat dwellers.
All that was merely a preparation for the great moment—the misery of mass unemployment. That is coming, not because of the difficulties of world recession, which we do not deny, but because of a deliberate policy. It is coming soon in the steel industry, unless it can be prevented, and in the coal industry and throughout the economy.
That is the result of the right hon. Gentleman's policies. I know that he likes to wear a hair shirt, but I do not see any reason why he should force the whole country to do so.

Mr. Bruce-Gardyne: On a point of order, Mr. Deputy Speaker. I wonder whether you can give the House some guidance. In the light of the course that the right hon. Gentleman's speech is taking, may we take it that it will be in order to discuss on this group of amendments such matters as the misery inflicted on the country by the chaotic performance of the right hon. Gentleman in negotiating in Brussels or the awful fate that he inflicted on the Labour Party when he was Patronage Secretary, as detailed day by day in Mrs. Castle's memoirs?

Mr. Deputy Speaker (Mr. Richard Crawshaw): The right hon. Gentleman is going fairly wide on the amendments and


it would be in order for other hon. Members to go as wide.

Mr. Silkin: It seems that we are in for an interesting debate, because clearly there will be a right of reply—indeed, judging by what the hon. Member for Knutsford (Mr. Bruce-Gardyne) has said, a right of several replies, some in the House and some in the Sunday Telegraph.
I hope that I was not going too wide. The clause is the philosophical nub of the Bill. If we are to deal with the four aspects that I have outlined, we must relate them to the philosophy of the Bill. I hope that I was not being unfair in stating the philosophy. The hon. Member for Kuntsford may think that I was unfair in outlining what the philosophy leads to, but I hope that he will agree that I spelt out the philosophy correctly. My text is that of the Secretary of State.
The trouble is that the philosophy is being given effect at a time when our manufacturing industry is in a worse position than ever before. The export of manufactured goods pays for the primary products, the food and raw materials, that we have to import into our island country in order to survive. For more than 150 years, it has been essential that we earn our living by the export of manufactured goods.
Unfortunately, imports of manufactured goods have equalled, and are in the process of overtaking, our exports of manufactured goods. The Treasury acknowledges that position, since its forecast shows that there will be a 20 per cent. drop in manufacturing capacity in this country over the next two years, and that is something with which we should concern ourselves.
It arises out of the economic climate that the Secretary of State is creating. He once said that it was necessary for a Government to provide three things—infrastructure, communications and training. The present Government have slashed all three. I do not know whether the right hon. Gentleman still holds that view, but, if so, it is not strong enough. Direct Government intervention is necessary if we are to have a manufacturing industry at all.
Every industry that the Government or the National Enterprise Board have stepped

in to save is a net exporter. That is why Governments and the NEB have intervened. We have to save our manufacturing industries and exporting industries in order to live.
We shall not stimulate full employment if the NEB's role is restricted so that it acts merely as a casualty clearing centre. We may patch up one or two industries, but we will not create the industries that are necessary for this country's well-being.
If we are anxious about the taxpayer, we must accept that the direct taxpayer and, indeed, the whole community have a right to participate in profitable transactions as well as casualty clearing transactions. That is the difference between the Opposition's philosophy and that of the Secretary of State. We do not believe that it is possible to stimulate British industry by disposing of public assets or to do so without the ability to assist or promote reorganisation in the public sector.
We are reinforced in our argument by the fact that practically every one of our developed competitors takes the same view and in some cases, certainly France and Japan, much more drastically than did even the previous Labour Government. That aspect has been of urgent importance in the growth and improvement of our competitors' economies. It is something that the right hon. Gentleman is turning away.

Mr. Eldon Griffiths: I have followed what the hon. Gentleman has said, as always, with the keenest interest. Can he explain one main point? Over the past 10 to 20 years in our country the public sector has become larger. The amount of industry, including that of manufacturing, managed in one way or another in the State sector has increased and yet in that period our competitive performance internationally has declined. Is there no connection between the two?

Mr. Silkin: I think the hon. Gentleman is tempting me to a reply with which he might actually agree. The reply is that this is not the only factor that is necessary if one is to have regeneration of industry. A second and perhaps as important a factor is what sort of management—labour relations one should have to ensure that industry progresses.
My feeling on this matter—and I hope that I carry the hon. Gentleman with me—is that what we really need is industrialists who are among the best educated in our schools as we can possibly get in industry. The hon. Gentleman's experience will be much the same as mine. It is only fairly recently, in the past 15 to 20 years, that scientists have been encouraged in our schools; engineers are hardly encouraged at all. A great deal has to be done on that aspect. That is part of the problem. I can only say this to him. If we had not taken those industries into public ownership, the position would have been 10 times worse than it is now.

Mr. Michael Grylls: How does the right hon. Gentleman explain the fact that British Leyland, prior to getting into difficulties in 1975, was producing 1·3 million vehicles a year and is now producing barely 700,000 vehicles a year, yet it has had £1,000 million of taxpayers' money poured down its throat? That is hardly a great success story, is it?

Mr. Silkin: It is rather a success story for a number of reasons. The hon. Gentleman asked me for the reasons and I will give them to him. The first is that, compared with its competitors—and its competitors really are in Europe, hardly at all in Japan, which is restricting its exports to this country—if he looks at the amount of investment that is going into their motor car firms, in France, Germany and, indeed, Italy, he will see exactly why. It is because we are under-investing and have done so for years.

Mr. Grylls: The right hon. Gentleman may not have heard the last remark that I put to him. Since British Leyland has been rescued, and has had £1,000 million of taxpayers' money—I admit that some has gone to pay wages and losses, but much has gone into investment, and many British Leyland plants, as he should know, are the most modern in Europe, if not in the world—they are not getting the productivity.

Mr. Silkin: The hon. Gentleman should study the figures. I do not have them before me at the moment, but I think he will find that in the German and French industries the investment figures are two

or three times as great as that. That is the key.

Mr. Budgen: The right hon. Gentleman seems to be attracted to the fashionable idea that all investment is good investment, but surely when one looks, for instance, at what has happened in the steel industry, where there was massive investment—as it turned out, over-investment—as a result of major mistakes made by successive Governments, does he not think that his suggestion that we want more investment is a great deal too simple?

Mr. Silkin: I was dealing with the question why, despite the investment in British Leyland, we were not producing as much as our competitors.
What the hon. Gentleman is saying, and I agree with him, is that investment has to be properly directed; it has to go into the right things. I wonder whether the hon. Gentleman would agree with me that all the major countries which have enormously expanded steel production—in fact, steel consumption in the world has gone up over the years—and have also massively invested in new plant and machinery have nevertheless succeeded in taking a very good share of the market.
I was saying that one could not stimulate British industry by disposing of public assets. Equally, one cannot stimulate British industry without the ability to assist or promote reorganisation in the private sector. I pointed to the examples in France, Japan and Germany of exactly that happening.
It cannot be left to the private sector to reorganise alone, because the private sector will reorganise its industry sometimes for reasons totally divorced from the national interest, sometimes totally opposed to the national interest. We saw that in the 1960s and in the 1970s. We do not want to see it in the 1980s, because the purpose of reorganisation is to engage industry in the national good. It is not merely to create a basis for asset stripping, which was what happened in those earlier days.
I feel that the fourth point with which we have to deal in this clause is the one in which we, above all others, should have an interest, and a strong interest. We talk—and it exists in the National Enterprise Board at the moment—about the


function of promoting industrial democracy. This Government and the Secretary of State are throwing that out of the window in the Bill. Yet it is an odd thing to be doing, because those of us who look back over the years to the immediate post-war period will remember that the German model of consultation, of management and unions working together, was created by the British Control Commission. The tragedy is that we did not impose the same form of industrial democracy in our own country as that which we encouraged in Germany. It seems to me illogical, and it is not only Conservative Governments but Labour Governments who have neglected it; it has even been neglected here.
If we want a viable, expanding and prosperous British manufacturing industry, there is only one way to achieve it, and that is by having the whole of the work force, management and workers together, working for the common good. In the many months that have gone by since this Government came to power, I have visited a number of factories. I am always refreshed by the amount of knowledge that is to be found on the shop floor. What worries and astonishes me is the enormous number of occasions when that knowledge and expertise are not used by management, when one has the idea that management knows best. It does not always know best.
The Secretary of State, in his attitude to management—and he has said over and over again "I will leave that to management"—is condemning a possible, a probable, a certain means of getting British industry to move into the 1980s. It is also a practical means of ensuring that we can go ahead of our competitors.

Mr. Cyril Smith: I congratulate the right hon. Member for Deptford (Mr. Silkin) on his conversion to Liberal Party policy. It is a pity that he was not converted when in Government. If anybody doubts that the right hon. Gentleman is describing Liberal Party policy, he should read the yellow book published in 1928. What he is saying has been Liberal Party policy for over 50 years. May we assume that the TUC and the trade union movement are now converted to the idea of worker participation in industry?

Mr. Silkin: I talked about industrial democracy. I said that it was interesting that in Germany, in the days of the Control Commission, a species of industrial democracy was enforced. That is an absurdity in a way.

Mr. Eric S. Heffer: Is my right hon. Friend aware that works councils, much in line with the policy in the 1928 yellow book published by the Liberals, were introduced in the Weimar Republic? They did not stop the rise of Hitler or Fascism. We must look deeper than that. We must examine the question of control of the means of production and then the possibility of introducing genuine worker management in relation to that.

Mr. Silkin: If my hon. Friend the Member for Liverpool, Walton (Mr. Heffer) had been in the Chamber earlier, he would have known that I was developing my fourth argument. We believed that we could enforce a system of participation. It is strange that we did not apply such a system ourselves. I am astonished that the Secretary of State should think it necessary to outlaw any reference to industrial democracy in the Bill. I find that surprising. That reference is deliberately removed.

Mr. John Patten: When the Labour Government had powers under the 1975 Act to promote industrial democracy, why was the pace of promotion so slow? Was it lack of willpower?

Mr. Silkin: I think that the pace was too slow. I regret that we did not act more rapidly. I assume that the hon. Member for Oxford (Mr. Patten) believes that that principle should not be removed from legislation.
Clause 1 represents the gulf between two basic philosophies—a philosophy which has shown us in nine short months how to destroy a country's economy and a philosophy which accepts that the way forward is through public intervention, public ownership and public control. We are not ashamed that that is our policy. We believe that it is right. In the light of that belief, I hope that the House will support the amendment.

Mr. Adley: I am slightly disoriented by having to speak to amendment No. 4, which is being taken with the amendment moved by the right hon. Member


for Deptford (Mr. Silkin). The House will understand if I do not discuss in detail the points raised by the right hon. Gentleman. I have no doubt that many of my hon. Friends will take him up on many of his arguments.
Seeing my hon. Friend the Member for Bury St. Edmunds (Mr. Griffiths) in his place reminds me of the last time that I had the temerity to move an amendment against my Front Bench. It was during the proceedings on the Maplin Bill. My action displeased my hon. Friends no end. It also displeased my right hon. Friend the Member for Sidcup (Mr. Heath). On that occasion a group of my hon. Friends, with some hon. Members from the Opposition, succeeded in amending the Bill drastically. We helped to destroy a Bill which we believed to be misconceived. I am delighted that the present Government obviously share that opinion, because they have no intention of reintroducing another Maplin Bill.
I hope that this afternoon I shall be able to persuade my Front Bench colleagues to recognise that we are ahead of them in our thinking on this matter. On page 15 of the Conservative manifesto it is stated:
We shall therefore amend the 1975 Industry Act and restrict the powers of the National Enterprise Board solely to the administration of the Government's temporary shareholdings, to be sold off as circumstances permit.
The dispossession by the State, either voluntarily or otherwise, of some of its holdings forms the basis of my amendment. I hope to carry the House with me.
Surely our aim is to ensure that the most productive use is made of the nation's resources. The right hon. Member for Deptford referred to the taxpayer. As he said that is a word often used by my right hon Friend the Secretary of State far Industry We all understand the word "taxpayer" to mean, the generality of people I presume that we all wish to act in the taxpayers' or public interest. As the taxpayers fund the NEB, they have a real interest in seeing how the board behaves, particularly in relation to the companies which it owns on behalf of the nation.
The management of each individual nationalised industry should not always be allowed to be the sole arbiter of what is the national interest. There may be

occasions when the individual commercial interest of a nationalised organisation is at variance with the wider national interest. That is the basis of the amendment.
Hon. Members have widely varying views about the role of the NEB. I believe that the NEB has a role. There is also a role for the Scottish and Welsh Development Agencies. I assume that the Secretary of State and his colleagues share that view. If they did not, we should be discussing a Bill to wind up those three bodies. If we accept that there is a role for the NEB, I hope that we can accept also that industrial policy stands to lose most by the imposition of dogmatic decision-making processes. I am sure that the hon. Member for Rochdale (Mr. Smith) agrees with me.
During the debate on what is now the 1972 Industry Act, the late Mr. John Davies made an impassioned speech about the way in which he thought that measure would revitalise the British economy. He said:
But it seems clear that we are at long last moving out of the trough into which we seem latterly to have been sunk.
The then Secretary of State, the right hon. Member for Bristol, South-East (Mr. Benn) supported that Bill, as did the Labour Party. The right hon. Gentleman said that the late Mr. John Davies had
introduced a Bill, which the Opposition welcomed, by announcing the largest subsidies by the taxpayers to the regions which we have ever known, to industry generally, and to shipbuilding in particular, with total expenditure far exceeding anything that has been brought forward by previous Governments."—[Official Report, 22 May, 1972; Vol. 837, c. 1023.]
When discussing the last Government's Industry Bill, the right hon. Member for Bristol, South-East said:
The British people will come increasingly to see the Bill as an instrument that they can use for themselves to put this country once again in the forefront of the world's industrial nations."—[Official Report, 17 February 1975; Vol. 886, c. 946]
The point that I am trying to make is that over the years successive Governments have tried to find State-involved solutions to revitalise British industry. I think that we would all agree that we have not done particularly well with any of the solutions that we have tried to labour for in the House. The conclusion that we are entitled to draw—I ask the right hon. Member for Deptford to accept this—is that State Control is not


the only way to solve our industrial problems.
We understand that there is a role for the State, but on its own the State has not done too well. When there is a conflict between the national interest and the interest of an individual nationalised industry, the Government have a duty, or the NEB has, to ensure that on these rare occasions—they will be rare—the national interest comes before the interest of an individual State-controlled company.

5 pm

Mr. Dafydd Wigley: I am following the arguments of the hon. Member for Christchurch and Lymington (Mr. Adley) on the amendment with considerable interest. It could be a useful amendment. Will the hon. Gentleman accept that in the same way as there can be conflict between individual State-owned companies and the interests of the State, so there can be conflict between the interests of a private company and the interests of the community as a whole, and that, therefore, similar powers should be applicable?

Mr. Adley: I accept the principle advanced by the hon. Member for Caernarvon (Mr. Wigley). I can think of many examples of private companies which have acted in a way which many might consider to have been environmentally unacceptable. One thinks of the role of some of the oil companies in relation to oil pollution. I accept the hon. Gentleman's point head on and do not wish to disagree with him. However, I should like to concentrate on the point of my amendment.
Over the last few weeks a number of my hon. Friends have tried to persuade the Government that in the case of the MG car, and possibly also Consett, we have an individual nationalised organisation—on the one hand British Leyland and on the other the British Steel Corporation—seeking to close down a manufacturing plant for reasons which it believes to be in its own narrow commercial interests. The Government have sternly resisted any of our attempts to suggest that the Government's role is to act, one might say, as a referee on occasions when we believe that there is a conflict of interest. The purpose of the amendment is to ensure that the NEB acts as a referee in such cases.
My hon. Friend the Minister of State wrote to me on 22 November in answer to my letter about British Leyland and the MG sports car. He said:
It would be quite inconsistent for us to require BL to act in other than their own business interests on a particular issue like the MG".
I challenge that statement. As I said, I believe that there is a clear reason why British Leyland wishes to kill off the MG plant, which is to promote its own rival product within its own organisation, namely, the Triumph TR7. British Leyland has decided that it wishes to concentrate volume sports car production in this country on the TR7. The trouble with the MG is that in spite of—certainly not because of—the efforts of management it continues as a successful car, accounting for over 50 per cent. of British Leyland's sales in North America. BL's answer is to kill off its own company so that it can create for itself a State monopoly in the volume production of sports cars. My proposition is that that is not at all in the national interest.

Mr. Eldon Griffiths: I do not follow why what my hon. Friend the Member for Christchurch and Lymington (Mr. Adley) has said about BL would create a monopoly of sports car production in this country. Why should not Ford go into sports car production if it wanted to? Why should not my hon. Friend, the Minister and I set up a company that makes sports cars? There is no reason why there should be a monopoly.

Mr. Adley: I do not know how much money my hon. Friend the Member for Bury St. Edmunds (Mr. Griffiths) has in his pocket, but I do not have enough this week to go into volume production of sports cars. I am trying to deal with the reality, which is that the MG is the only volume British sports car other than the Triumph TR7, both of which are owned by BL. The fact that Ford has not gone into this market probably indicates that it is a highly specialised market, whereas Ford is a general manufacturer. My hon. Friend has helped me to make my point. This is a special sphere of production and it must be dealt with in a specialised manner.
I am comforted by the fact that my hon. Friend the Under-Secretary of State


for Trade told me what his view was at Question Time last Monday. He said:
I do not think that monopolies of any sort are normally desirable at all."—[Official Report, 4 February 1980; Vol. 978, c. 17.]
The reality is that if MG is killed off by British Leyland there will be a monopoly in this country of volume production of sports cars, namely, the TR7.
In support of my case I should like to quote a letter that I received from the secretary of the shop stewards committee at the MG factory. This is directly relevant to what I am trying to say, and it is also important. He said:
We cannot understand the logic behind the thinking of the BL Board, in wanting to discontinue production of a car that has proved itself worldwide over the years, unless it is to push the sales of the TR 7 which we all know does not command the same market potential as the MG. We believe that a takeover by Aston Martin would be in the best interests of the country and the employees at Abingdon and we urge you to do all in your power to get the Government and the Board of BL to seriously consider this.
That is not my split infinitive, I hasten to add.
BL have said they need the space at Abingdon for unpacking Honda components, but we think that there is room for this operation and the continuing of production of the MGB. A spokesman from BL has indicated that the company are losing £800 per MGB but they have refused to tell us how this sum is arrived at. If the sum of £800 is anywhere near correct, it is because of the management's failure to supply us with the components to maintain production targets. We have, as we are sure that you are aware of, an industrial relations record second to none in the motor industry. All the Trade Unions, manual and staff, have always worked with the one aim of producing MG cars to the satisfaction of the company and the employees.
I believe that that letter represents the view held not only in the Abingdonfactory—I am sure that if my hon. Friend the Member for Abingdon (Mr. Benyon) catches your eye, Mr. Deputy Speaker, he will wish to elaborate on that—but widely throughout the country.
I turn now to the word "intervention". It is clear that the reason why my right hon. Friend the Secretary of State has not shared our view is that he does not believe in any form of intervention. We are in danger of inventing another political boo-word because the NEB, by funding British Leyland, and the State, by funding many of the nationalised corporations, constantly intervene. If "intervention" is defined as intervening with

taxpayers' money to prop up an organisation that would probably go bust, in general terms I do not think that we would want to support it. But what we promote in this amendment is precisely the opposite. Here is a company which clearly has a good marketing future which we believe to be viable but which a nationalised corporation wants to kill off. It is our belief that that is contrary to the national interest.
I understand that the last thing that any nationalised industry wants is a company to come along and prove, with its success, that it can manage more efficiently an industrial enterprise which the nationalised industry has been unable or unwilling to manage successfully. But that dog-in-the-manger attitude is not something I support.
My right hon. and hon. Friends, when asked about intervention, will not, I am sure, demur when I say that in our proposals for British Airways and British Aerospace we are directly intervening for reasons which we believe to be in the national interest. All I am suggesting in this amendment is that we might extend that principle and, at the same time, save a substantial number of highly skilled jobs.
I should stress that the result of saving MG at Abingdon, which could be achieved by this amendment, is not something that would be done at the taxpayers' expense. Surely, if there are people who are willing to invest millions of pounds of their own or their shareholders' money to keep a manufacturing process going and a plant which a nationalised corporation, or any corporation, wants to close down, the last thing that we in this House should do is in any way to discourage them. Therefore, the objective of the amendment is to ensure that where a factory of that sort is about to be closed, at least the NEB will have the task of going in to see whether there is anyone willing and able to keep that plant going.

Mr. Wigley: Will the hon. Member go over one point which he has not made absolutely clear? From the wording of the amendment as it stands—I find it a very encouraging amendment, and I think that it is one that will appeal on a broad basis in the House—does he accept that it provides powers for the NEB to intervene


in a situation in which a private company is either closing down a manufacturing plant or changing its use from manufacturing? The National Enterprise Board—or in Wales or Scotland, if a similar amendment is proposed, the SDA or the WDA—could intervene for the very excellent reasons that he puts forward—to maintain the employment and the activity of the plant.

Mr. Adley: With respect, the amendment does not do any such thing. I do not wish to disillusion the hon. Member, but if he refers to the amendment and then the original Act—

Mr. Wigley: I have done so.

Mr. Adley: —he will find that the Industry Act 1975 refers to companies that are in the ownership of the NEB, so, if the company is not in the ownership of the NEB, clearly that provision does not apply.

Mr. John Silkin: I am rather impressed with what the hon. Gentleman says. I take it that he would reiterate that he would have no objection if that were the effect of the wording. If that is so, I have a feeling that although I have some quarrel with the wording—I should not like to see it used as a kind of creeping denationalisation or back-door denationalisation, which perhaps it could be with the present wording—nevertheless, if he is prepared to go along with the view of the hon. Member for Caernarvon (Mr. Wigley), I would advise my hon. Friends to support him in the Lobby.

Mr. Adley: Again, I can only say to the right hon. Gentleman that the amendment as drafted relates, as he obviously knows, to the Industry Act 1975 and to the role of the NEB. I should not wish to mislead anyone. I am not putting forward a proposal for anything other than those companies which are presently held in the ownership of the NEB. I should have thought that that was self-evident from what I have been saying. I would welcome the right hon. Gentleman's support, although that may not be necessary, because I am sure that my wise hon. Friends on the Government Front Bench will have heard my speech and will immediately want to accept the new subsection. However in the unlikely event that that

may not be so, I should not like to mislead the right hon. Gentleman by suggesting that there is anything in my mind other than what is in the amendment, in that it relates to companies in the ownership of the NEB.

Mr. John Silkin: I hope that the hon. Gentleman will not mind my intervening too much, but this is an important matter. The hon. Member for Caernarvon made a very important point. It is not what was in the hon. Gentleman's mind at the start, but it concerns his reaction to the point put to him. He might ask leave to withdraw the amendment, but I am not certain that he would get it.

Mr. Adley: I do not want to hog this. I am referring to one amendment. It relates to the NEB. There is nothing more that I can say than that. That is what is in my amendment, and that is what is on the Amendment Paper.

Mr. Wigley: I am very pleased to speak to my amendment No. 5. Before doing that, however, I should like to refer to amendment No. 4. It is a very valuable amendment. I have studied closely the effect that it would have on section 2(2) of the Industry Act 1975. That subsection states:
The functions of the Board shall be".
It does not say "in relation to companies owned by the Board." If amendment No. 4 were incorporated in the Bill, section 2(2) would read:
The functions of the Board shall be ensuring that, where an individual manufacturing plant is scheduled for closure or for change of use from manufacturing purposes, such plant should be offered for sale to any buyer who is able to satisfy the Board of his intention and ability to continue the existing purposes.
I think that the hon. Member for Christchurch and Lymington (Mr. Adley) has put a very strong and valid case for there to be a degree of intervention where there is such a drastic happening as the closure of a plant and loss of jobs, possibly the end of an important product line, or the change of use of premises from manufacturing purposes to other purposes. That case is equally as valid in the circumstances of a privately owned company as it is with a publicly owned company. The hon. Member has made the case overwhelmingly, and it deserves the support of all hon. Members.

Mr. Adley: It may be equally valid, but it is not in my amendment.

Mr. Wigley: The wording of the hon. Gentleman's amendment does not refer to either purely private or purely public companies, and the wording in the orginal Act, which is to be amended by the Bill, does not put it in that context either. Therefore, when incorporated into the original Act, this wording would have that purpose. It is a very worthwhile purpose and I welcome it. I hope that the hon. Gentleman's hon. Friends will press the amendment and that it is given support on both sides of the House and carried.

Mr. Adley: It is no use. The hon. Gentleman cannot get away with that, because the Industry Act 1975 was an Act to establish the National Enterprise Board. How can the hon. Member possibly draw that conclusion from it?

Mr. Wigley: I do so because, like the WDA and the SDA, the NEB has an intervention power. That is one of the reasons why the Conservative Party opposed their establishment in the first place. The general responsibilities placed on them are responsibilities not only towards companies that they own wholly; they also assist in other circumstances. They buy up minority shareholdings. The original powers were to reorganise industry. We had a long debate in Standing Committee on this matter. The powers to reorganise industry should be maintained not just for reorganisation in the public sector; there was very often a need for help in and stimulation of reorganisation in the private sector, and very often on the interface between the private sector and the public sector. The NEB has a role which impinges on the private sector.
I can understand that some of the more dogmatic Conservative Members would object to that, although I do not think that the hon. Member for Christchurch and Lymington is in that group.
Certainly there is a case that the NEB should, by the powers conferred on it under the 1975 Act—powers that are not amended by the Bill—have the responsibility, as it has, to keep an eye on the private sector as well. The incorporation of amendment No. 4 into section 2 of the 1975 Act will strengthen that in a wholly valid way. It can be used in

many of the very difficult circumstances that face so many communities in Britain now.
That is the background to amendment No. 5. In many ways, I regret that I put forward amendment No. 5 only in the context of the WDA, because I believe that it is valid in terms of the NEB and the SDA as well. But I put it forward in that context because my argument can be put forward in circumstances that I understand, and my amendment refers to the need for the WDA or the NEB to intervene where necessary to prevent the loss of industrial undertakings in Wales as a result of decisions taken by companies outside Wales.
The point of the amendment is that a whole string of responsibilities is laid on the WDA by the Industry Act 1975, which establishes it. They are responsibilities similar to those of the NEB—to promote, to instigate, to try to attract and set up industry. But there should be an equal responsibility to prevent the closure of industry and to prevent asset stripping, as the right hon. Member for Deptford (Mr. Silkin) mentioned. We have seen the effects of asset stripping on so many of our communities. There is no doubt that it can very often have an effect directly contrary to the interests of public policy.
I should like to refer to a tragic instance in my constituency which has occurred during the last seven days. I do not apologise for going into detail on one case to illustrate my point, as the hon. Member for Christchurch and Lymington did, in respect of Triumph, to illustrate his point.
I refer to the factory of Bernard Wardle (Everflex) Ltd. in my constituency, which manufactures leathercloth. It is a factory that developed after the war as the only manufacturing capacity of the company. Thereafter, that company grew, acquired more plant and developed and it is now a multi-plant company. The factory in my constituency employed 800 people at one time but it now employs 322 only. Not only has it been successful but it is still successful. The figures for last year speak for themselves. Last year, it made £654,000 profit and maintained a substantial turnover with a volume of sales that was almost identical to the previous


year. All that has been achieved in a difficult time for the PVC industry.
In the last few years, there has been a takeover bid for that company by the Birmingham and Midland Counties Trust Ltd. That is a group that is often associated with takeover bids and it has been lurking around with 29 per cent. of the equity of the company. Within a week of the announcement of the takeover bid, there was an announcement about the closure of the factory in my constituency.

Mr. Bob Cryer: Scandalous.

Mr. Wigley: Last year the factory's accounts showed that it had reserves of £2¾ million. It is running at a profit in a special development area—although, if Conservative Members have their way, it will be a development area only in August—which vitally needs jobs. It will be closed down and the work will be moved away from the area. The net result will be that not only will the jobs of 322 men be hit but 322 families—1,000 people or more—will be affected in an area where unemployment is running at a gross 10 per cent. and is likely to rise to near 20 per cent. with the developments in the pipeline.
That is an instance of what happens when such factories are closed. I have no doubt that it falls into the category of asset stripping. It is an operation that is directly contrary to the public interest, and I believe that it should be the responsibility of bodies such as the Welsh Development Agency and the NEB to step in. Not only should they try to encourage the development of new factories and employment but they should prevent the closure of factories in sensitive areas such as this area at the whim of financiers who are trying to make a quick buck.
That is the background to my amendment. Most hon. Members will know of instances in their constituencies where there have been takeovers, closures, asset stripping and so on. Ordinary people doing efficient, productive and profitable jobs are those who suffer. They are thrown like disposable side-lines on to the scrap heap in order that a restructuring of a financial empire can take place. It cannot be permitted to go on. If the Government do not intervene in such cases, they will drive people to more extreme politics because of the effect on

their lives, families and communities. Whole communities are written off by this sort of development.
I have tabled the amendment because I believe that there should be powers to ensure that, when decisions are taken away from a manufacturing plant, there can be an acceptable intervention in the public interest by the WDA—in the case of Wales and of this amendment—the NEB or the SDA. The amendment stands on all fours with amendment No. 4, which has the same purpose—to ensure that when a plant is closed there can be intervention to save jobs. For that reason, not only do I support amendment No. 5 but I also believe that it will be important to support amendment No. 4 when it is called.

Mr. Eldon Griffiths: I shall try to make a brief speech. I shall not be able to support the amendment of the hon. Member for Caernarvon (Mr. Wigley)—nor, indeed, I must tell him plainly, the amendment of my hon. Friend the Member for Christchurch and Lymington (Mr. Adley).
I was one of those who supported the abolition of the IRC. Now I have to say that I regret that. I believe that it was necessary to trim the sails of the IRC, but, looking back, I believe that it was a mistake to get rid of it. Therefore, I believe that there is an important role for the NEB. I wish its chairman and new chief executive-designate, Mr. Ian Halliday, success in their many endeavours.
However, I do not support the functions and role of the NEB as set out by the previous Government. Therefore, I am pleased that the Bill has been brought to the House more accurately to define and limit the functions of the NEB. To be fair to the Labour Government—I always wish to be fair to the right hon. Member for Deptford (Mr. Silkin)—their purposes in setting up the NEB were mixed. I am sure one purpose stemmed from their belief that industry required State intervention and funds in order to be rationalised and to improve its performance. I do not quarrel with that, but I suspect that the previous Government had other motives. The right hon. Gentleman will not disagree if I say that his party believes in extending public ownership. That was one of its purposes in setting up the NEB—it was a mechanism for the


extension of the State into other areas, notably manufacturing industry. He would not expect me to agree with that.
It is fair to say that the former Secretary of State, the right hon. Member for Chesterfield (Mr. Varley), who is not here this afternoon, had something else in mind. I am referring to what might be called the social and political aspect, namely, that the NEB, through participatory democracy and so on, would be engaged in what I would describe loosely as social engineering. I believe that there is a role for the NEB in certain specific industrial fields. However, I do not wish to see it engaged in the extension of public ownership, which I believe to be a political matter. Nor do I wish to see it involved in social engineering, which I do not see as being part of its job.

Mr. John Silkin: I pay the hon. Gentleman the compliment of intervening in his interesting speech, to which I have listened carefully. I understood him to say that he regretted that the Conservative Government in 1970 abolished the IRC and introduced the Industrial Development Executive. His regret, of course, is due to the fact that the Government stripped themselves of the power to reorganise industry.

Mr. Griffiths: No.

Mr. Silkin: In fact, that is what the IRC was helping to do. I understand his antipathy to public enterprise, but surely he cannot object to the ability to reorganise where necessary that was contained in the 1975 Act. It was never compulsory, but it could be done by agreement.

Mr. Griffiths: As I develop my few remarks, I hope to show that I find the role of organisation and reorganisation by the NEB to be superfluous.
I declare an interest. I am a director of an engineering group which makes most things, from steel flooring to complex dynamometers and machine tools. I am also a director of a road building equipment company and a substantial mill that makes steel tube in South Wales. I am heavily involved in the three matters that make industry tick—management, machinery and motivation, motivation of workers and management alike. I shall make a few points in respect of the amendment, which touches on all aspects of the Bill.
I believe that over the past 20 years management in this country has been knocked about by Governments of all complexions in a manner that almost invites poor performance. It has been overtaxed, unrewarded and, in some cases—though not all—overworked. In many cases, management is poorly trained for the jobs it has to do. We have insufficient engineers and scientists, as the right hon. Member for Deptford has pointed out, in our management.
However, I believe that British management has suffered from two particular disadvantages that are not so much in evidence in other countries.
First, Governments have not provided it with a stable industrial environment in which to do its job. Far too often, the interest rates with which it has to deal have gone up and down like yo-yos. Far too often, the frontier between the State and the private sector has been moved about by successive Parliaments in a way that has made it difficult for management to see continuity. Labour legislation has been changed left and right. Our fiscal policies have been changed up and down. As a result, unlike the stable industrial environment of competitors in many other countries, British management has had to operate against an industrial environment that chops and changes. That prevents it from doing its job.

Dr. John Cunningham: If the hon. Gentleman believes that—as I do—why is he supporting further changes on the basis of party dogma?

Mr. Griffiths: I shall come to that point in a moment.

Mr. Gregor MacKenzie: Regional policy has gained wide support from all parties. A good regional policy was provided by the 1972 Act. That Act was introduced by Christopher Chataway, a colleague of the hon. Member. Uncertainty is now caused by chopping and changing regional policy and grants. Such actions by the Secretary of State for Industry have created more uncertainty than ever before.

Mr. Griffiths: The right hon. Gentleman knows that the previous Labour Government criss-crossed the country with a series of special development areas and development areas. Some areas


received subsidies and others did not. Managements could not take industrial or economic decisions; they had to decide in which direction to go according to political whims. Regional policy provided yet another cross for management to bear.
Another aspect of the confused managerial environment is the removal of authority from management to trade unions. Competitive manufacturers in other countries do not suffer from that problem. I do not wish to make a speech that might be regarded as an attack on trade unions. They have an indispensable role to play in any industrial society. However, middle management and shop floor management find that the rug is pulled from beneath them far too often. That occurs on the shop floor where the task of producing goods and getting them out of the factory door is done. Management is therefore incapable of making operational decisions because shop stewards involve themselves far too often. Managements are often poorly trained and under motivated. They also suffer from a degree of political interference and of shop steward intervention that damages their job.
It is true that industry suffers from a lack of investment. However, investment is not bad in many areas of our industry. I have personal knowledge of the fact that a new and highly complex machine is often installed that, in order to be profitable, demands 70 to 90 hours of work a week. It must work those hours in order to achieve the necessary payback to compete internationally. Frequently an agreement is reached—as it must be—with the trade unions. However, once an agreement has been reached that includes higher pay per hour in order to achieve greater productivity, for one reason or another we unfortunately do not get the required result from the shop floor.
I know of machines that have been standing idle for far too long because trade union agreements have not been honoured. There is antipathy to shift work. Perhaps trade unions should not make agreements that include shift work. When they do, workers are often unwilling to accede to the agreement. The machine then stands idle and we do not get a return. I beg the House to

recognise that investment by itself is useless. The only investment that counts is that which produces a result.

Mr. Heffer: The hon. Gentleman has raised a number of serious points. In order to justify his claims, will he spell out concrete examples? Hon. Members should not make statements in the House unless they can back them up.

Mr. Griffiths: Perhaps the House will forgive me if I do not go into detail, in the interests of time.

Mr. Heffer: Just one example.

Mr. Griffiths: I shall give the hon. Gentleman an example, if he allows me not to specify the company involved. A machine costing £850,000 was installed in a plant in the North-East with the agreement of the trade unions. The company was involved in steel-related engineering trades. Until a few months ago, that machine had been standing idle for about 18 months. It is necessary to get 84 hours of work from the machine per week in order to justify pay-back. An agreement was reached with the unions concerned, but the men on the shop floor were not prepared to accept shift work for various reasons. That shift work would have allowed the machine to earn its keep.

Mr. Heffer: The hon. Gentleman mentioned the unions concerned. I assume that he is referring to national officials who made the agreement. However, did they consult their rank and file members? Did they put the decision to a ballot?

Mr. Griffiths: The hon. Gentleman must not tempt me further. I was making a general point. Managements must have a stable environment, and it is important that neither the Government nor trade unions should usurp their authority if management is to do the job and get a return on investment.
The amendment concerns the promotion of private ownership. I favour that and I shall support the amendment. On the whole, private ownership has done a better job. When one looks at the assets held in the public or private sectors, the question arises as to who will put them to the best use. I do not hold any doctrinal view. It might be shown that the public sector has done, or is


doing, a better job of using its limited assets. If that were so, I should favour the public sector.
The performance and record demonstrate that the public sector has generally made a thundering loss. There can be no doubt about that. The information is all there in the books. That means that there is a transfer of resources from the profitable private sector to the unprofitable public sector in order to make up for those losses. Perhaps there are some compensatory advantages in the public sector that justify that transfer of assets and that justify the taxation of the private sector in order to help the public sector.

Mr. Cryer: Mr. Cryer rose—

Mr. Griffiths: I shall not give way as I must complete my point.
The use of other people's assets in the public sector has produced a loss. I shall ask some simple questions. Has the public sector done better on prices? However one measures the reality, the public sector has done worse on prices. Has the public sector done better on deliveries? Now that the State is involved in manufacturing, the public manufacturing corporations have generally done worse on deliveries. If I am pressed, I can give examples. Has the public sector done better on service to the customer and to the consumer? One has only to think of British Rail and the Post Office. The evidence is clear. The public sector has done worse on service to the consumer.

Mr. Cryer: Mr. Cryer rose—

Mr. Griffiths: Has the public sector done better in industrial relations? One does not need to visit the steel industry or British Leyland to conclude that labour relations are worse in the public sector than in the private sector. On prices, deliveries, design and industrial relations, and taking into account the enormous financial losses, the record shows that the public sector has done worse and the private sector better, whether we like it or not.

Mr. Cryer: British Aerospace is profitable and has a good industrial relations record. On Second Reading of the British Aerospace Bill, the Secretary of State said that he had no criticism of

the men, management or product, but the Government are selling British Aerospace to private enterprise. On the hon. Gentleman's criteria, will he vote against further attempts to denationalise British Aerospace?

Mr. Griffiths: That is another Bill.
I wish to conclude by looking at the second part of the clause. The purpose of the first part is to promote private ownership, and I believe that we ought to promote private enterprise because it does a better job. The second part concerns the disposal of securities and assets held by the National Enterprise Board. I favour that move but have some specific questions. How is it to be done? What is the timing? Who will make the decisions? In specific areas of the National Enterprise Board's portfolio, will the board of the company contemplating privatisation decide the timing, the price and the manner of disposal of assets?
I believe that in the Bill the National Enterprise Board and the Department of Industry will make those decisions, and I understand why. However, I should like an assurance that the boards of the many companies within the National Enterprise Board that sooner or later—and I hope sooner—will be sold back to the private sector will be carefully brought into discussions on timing, price and manner of disposal. It is necessary to give those managements confidence, and it is essential that they shall be taken fully into account when such decisions are made.
A problem that my right hon. Friend must be facing is that, with the present level of the stock market, it is difficult to float many of the companies in the National Enterprise Board portfolio. It is difficult to commend to the House or the public the sale of those companies at a thundering loss. It maybe necessary to wait a little until the market improves and we can see a better return on the public equity held in those companies. I should like to know who will decide, how that decision will be taken and how we can form a judgment as to whether the price obtained is the right one.
I have spoken longer than I intended, largely due to interventions. My right hon. Friend has the Bill just about right. He has not thrown out the National


Enterprise Board. He has clipped its wings and defined its function. He has also increased his control over the National Enterprise Board, which I do not like. I find that difficult to justify. With all their faults the civil servants in the National Enterprise Board are slightly better than those in the Department of Industry. With that exception, I believe that my right hon. Friend has the balance just about right. Therefore, I oppose the amendment and strongly support the Bill.

Mr. Gregor MacKenzie: The hon. Member for Bury St. Edmunds (Mr. Griffiths) and I were elected to Parliament on the same day. We have been here almost 16 years and have not often found much to agree about. I disagreed with most of the hon. Gentleman's speech, particularly regarding profitability and service under public ownership compared with private enterprise, but I agree that British industry and the entire country are in need of stability. Over the years, we have experienced far too much uncertainty. However, I do not believe that the proposals in clause I offer greater stability. They will create a great deal of uncertainty, particularly in my part of the world—and I hope that I shall be excused if I concern myself with the Scottish Development Agency.

I was not privileged to serve on the Committee, although I read some of the Minister's remarks. On Second Reading the Government appeared to show less concern about both development agencies than I would have hoped. The Secretary of State referred to the agencies only briefly. In winding up, the Minister of State devoted one paragraph to the Scottish Development Agency, and that was only after a Scottish nationalist Member intervened to ask a question. I hope that in discussing this amendment today the Under-Secretary of State for Scotland will tell us how he sees the role of the Scottish Development Agency and how it can assist our grave unemployment problems.

At Question Time today, in an odd reply, the Under-Secretary indicated that a great deal had been done for the Scottish economy during the nine months that this Government have been in office. The hon. Gentleman may be able to refresh

my memory, but I believe that all this Government's actions have been unhelpful to Scottish industry. When my right hon. Friend the Member for Deptford (Mr. Silkin) suggested that, the hon. Member for Wolverhampton, South-West (Mr. Budgen) said that the problems were all due to the actions of the Labour Government.

Whenever the Government cannot think of the right answer, we once again hear the speech about the inheritance that they were left by the Labour Government. But it was not a Labour Government who substantially increased value added tax or the minimum lending rate. We did not create uncertainty among British management by changes in regional policy and the regional development grant. It was not a Labour Government who, a week or so ago, increased gas prices to an artificial level. Pausing there, that is an example of Government intervention, and we should like to see Government intervention in the steel industry. The Secretary of State is selective about the areas in which he chooses to intervene.

The Government actions that I have listed, which have adversely affected Scottish industry in the past few months, have hit small firms particularly badly. The Under-Secretary of State for Industry is genuinely interested in small firms, and we often discussed them when I was in the Department of Industry. What will the Scottish Development Agency do for these small companies? These small to medium-sized companies have been hard hit by the increases in VAT and the minimum lending rate. Under this Bill, will the Scottish Development Agency continue to assist them? I believe that in Scotland we have a greater proportion of smaller companies than is the case in any other part of the United Kingdom, so I hope that the Minister will understand my concern.

In the past year in the Strathclyde Region almost £1 million in grants and loans of one sort or another was given to small companies by the SDA. The Secretary of State says that he hopes that small companies will grow and prosper. If that is to happen, there must be a clearly defined role for the SDA.

Later in the debate we shall be discussing the counselling service that was


introduced by the previous Labour Government in Newcastle and the small firms information centres that were introduced by a previous Conservative Government. We must have clarification of the role of the SDA in relation to small firms. It is an area in which the SDA could provide considerable assistance.

Another issue that worries me is what, in shorthand, could be termed as rescue cases. I know that the Under-Secretary of State for Scotland has strong views on the matter. In Committee he said:
One of the basic economic errors made by the previous Government lay in their apparent belief that any kind of job, viable or not, productive or not, should be preserved artificially and indefinitely by never-ending injections of public money."—[0fficial Report, Standing Committee E, 4 December 1979; c. 511.]
That was not true. The Scottish Economic Planning Department took the advice of the SIDAB before the SDA made an injection of capital into public companies, and an elaborate structure was laid down for that purpose.

Will the Minister, when he replies, tell us what he proposes to do when there is closure after closure? There are 200,000 unemployed in Scotland. There must be some further injection of public money or there will be an artificial position. I know that the Minister is a chartered accountant, who likes to read the balance sheets and likes to have them properly sorted out at the end of the day. However, there is more to the government of the county than ensuring that balance sheets look nice and tidy. We are talking about the lives of 200,000 people. I hope that when he is considering the closures the Minister will find a role for the SDA.

Had it not been for the good work done by SEPD and the SDA, there would be many more unemployed in Scotland. It is not good enough for the Minister to say that it is better to have a nice clean balance sheet than to be concerned about people's livelihood.

I turn to the newer industries. In Committee my hon. Friend the Member for Hamilton (Mr. Robertson) asked the Secretary of State about the micro-electronics industry. I had previously questioned him about that matter, but he has been less than helpful in his responses.

When the Labour Party governed the country, we introduced two excellent schemes to assist the development of the micro-electronics industry. As the House knows, it is of exceptional importance in Scotland, because we have a higher number of jobs connected with micro-electronics than in any other part of the country. We need these jobs because of of the rundown of the steel industry, the shipbuilding industry and the coal industry. It is up to the Government to take some action. I have written to the Secretary of State on the matter, but he sent me an unusually churlish reply and brushed my question aside in two paragraphs. He said that he was thinking about the matter, but I have had no word from him since.

When the Minister replies, perhaps he will indicate how he sees the role of the SDA in high technology industry. I am told that the answer can be found in the guidelines published by the Government recently. However, I could not discover from those guidelines any reference to the way in which the SDA might be involved in that industry.

I am conscious that a major problem is the shortage of mobile projects. My anxiety is that where we have such projects they should be encouraged to go to the parts of the country where there is the greatest unemployment. I see a special role for the SDA in attracting these industries and ensuring that they play their full part. The Secretary of State must allow for some element of risk-taking by the NEB, and certainly by the SDA and the Welsh Development Agency. I understand that there has been an instruction from the Government to these organisations to be much more cautious than they have been in the past. I am all for caution and prudence, but at the same time we are dealing with many thousands of unemployed and we should be a little less cautious than we have been in the past.

There is a new chairman of the SDA. I make no complaints about that. Like many hon. Members, I know him well and respect him. Indeed, I was responsible for his first-ever public appointment to a development corporation. I hope that he will not be told that he is there as a chartered accountant. He is there as an entrepreneur, working on behalf of the SDA.


I hope that he will not have his role restricted and that the new guidelines that have been given to him will not restrict his work.

In Scotland we depend heavily on the service industries. The SDA has not been as helpful to the service industries as it might have been. I hope that the Secretary of State will tell the SDA that service industry is an area of activity of growing importance to Scotland and one in which the SDA has an important role to play.

There has been no clear definition from the Government of the future role of the SDA. We know that there are members of the Government who lo not like the SDA, and there are others who dislike it intensely and would like to cut its throat. I hope that the Minister will clarify the position when he replies and give some guidance on the matter.

Mr. John Peyton: One of the cries to which the House is especially addicted is "injection of public money". I was a little surprised to hear the right hon. Member for Rutherglen (Mr. MacKenzie) lend his support to such fatuities. Injection of public money is so easily spoken of, but it is only a superficial way to approach the problem.
As I listened to the right hon. Member for Deptford (Mr. Silkin) moving his amendment, I cherished the hope that I might be called immediately after he had sat down and before the House had the chance, in its mercy, to forget what he had said. I do not wish to inflict any pain now by reminding the House of his speech, but it was one of the widest and most irrelevant speeches that I have heard in any debate in the House, and that is saying a considerable amount.
A newcomer to the House could be encouraged to think that there is merit in the amendment. Had the right hon. Gentleman's intention been the purification of the legislation, I should be tempted to support the amendment. But that is not his intention. Therefore, I take the opportunity of referring to the horrible terminology with which modern statutes are adorned. No one looking at the Bill could understand one word of what clause 1 means. That is disgraceful. I hope that my right hon. Friend the Secretary of State, for whose intellectual prose we

all have great respect, will lend his influence in an effort to cleanse rather than to dirty the statute book with this kind of stuff. In no way was it the right hon. Gentleman's intention to clean up the legislation.

6 pm

The right hon. Member for Deptford brings considerable resources to the Dispatch box—not least a certain patchiness of memory, which he deployed with great effect today. He forgot, or appeared to forget, the messy footprints that he and his friends have left all over the statute book. He forgot the various essays that he and his friends have made in public ownership over the years. He did not seek to justify their record. Nor did he seek to indicate—because it was not possible—what he and his friends had learnt from each of those experiments. He apparently forgot the veritable cataract of legislation that he and his friends unleashed upon industry. He forgot, sadly, the feud—I put this as kindly as I can—which he and his friends have done nothing to diminish, between the two sides of industry.

The right hon. Gentleman made one remark to which I should like to call particular attention—that we cannot leave reorganisation to the private sector. In all conscience, one could not accuse him and his friends of having done that. They have left nothing to the private sector of industry. They have been constant in their tampering and interference—[Interruption.] The hon. Gentleman may say what he likes afterwards, but I assure him that had he been on the receiving end of that unending cataract of legislation, as the management of industry has been, he would not regard this as a laughing matter.

One of the most favoured pastimes in the House has been the examination of the blemishes of management, yet I do not believe that successive Governments or the House of Commons can count much to their credit in what they have done to ease the considerable difficulties facing modern management.

Again, this afternoon we have had one of those arid debates in which the House of Commons has shown that it unable to get itself forward into the second half of the twentieth century and to understand


that wealth is created not by politicians, civil servants or trade union leaders but by industry.

Mr. Ted Leadbitter: The right hon. Gentleman has reverted to the venom of years ago since his Prime Minister dropped him from office. Will he try to address himself to the amendment? As I followed his words, he has not understood clause 1. Indeed, he said so. What is he talking about if he does not understand clause 1 or the amendment?

Mr. Peyton: The hon. Gentleman himself secretes a few miserable drops of venom, so let him not talk to me on that subject. The hon. Gentleman did not have the privilege or, perhaps, the good fortune of hearing his right hon. Friend the Member for Deptford move the amendment. I was not talking about the merits of the right hon. Gentleman's argument. In my initial remarks I referred to the untidiness of this legislation—the awful phraseology, which almost forbids understanding. On the other hand, I applaud the purpose of the legislation, in contradistinction to the right hon. Gentleman.

I want now to finish my remarks.

Mr. Leadbitter: Thank God!

Mr. Peyton: The hon. Gentleman's interventions contribute greatly in helping the House of Commons to understand him, and for that we must be grateful.
The right hon. Member for Deptford made only one positive point that showed any marks of humility—the admission that we had all neglected the cause of the engineer. I certainly agree with him on that. We have immense leeway to make up, but I do not believe that the debate we have had on this and almost every other industrial topic that I can recall since I have been a Member can be said to have been of assistance to that cause.

Mr. Don Dixon: I support the amendment because it seeks to delete clause 1, which is the nub of the Bill. If the amendment falls I shall support amendment No. 4, in the name of the hon. Member for Christchurch and Lymington (Mr.Adley) who, I think, has had reservations since he perceived that he was getting support from the Opposition. Alternatively, I shall support amendment

No. 5 if, as the hon. Member for Caernarvon (Mr. Wigley) suggested, it can be extended beyond Wales.

Mr. Adley: I do not mind from where I get support. I am delighted to welcome support from either side of the House. I have no reservations about getting support from the hon. Gentleman. The only reservation that I have is the interpretation put on my amendment by the hon. Member for Caernarvon (Mr. Wigley). If he is right, clearly it is not what I intended. I am waiting to find out whether I am right. I shall more than welcome the hon. Gentleman's support if I am right.

Mr. Dixon: I assure the hon. Gentleman that he will get my support if the amendment remains as drafted, not in the way that he meant to draft it.
On Second Reading, the Secretary of State said:
The main purposes of the Bill are to modify the functions…of the National Enterprise Board and the Scottish and Welsh Development Agencies.
What a pity it is that the right hon. Gentleman, with his usual honesty, did not say that the purpose of the Bill was to nullify the NEB, the Welsh Development Agency and the Scottish Development Agency, because that is precisely what clause 1 does.
The Bill is probably the most misnamed Bill to be presented before Parliament. It should be called not the Industry Bill but the National Enterprise Board (Abortion) Bill 1980, the Welsh Development Agency (Abortion) Bill 1980 or the Scottish Development Agency (Abortion) Bill 1980, because clause 1 effectively does what the Tories want, namely, to kill the National Enterprise Board.
The Secretary of State more or less indicated that on Second Reading when he said:
I need hardly remind the House of our opposition to the basis on which the National Enterprise Board was established in 1975, and our continuing opposition to the way in which it has been encouraged to operate."—[Official Report, 6 November 1979; vol. 973, c. 240.]
Clause 1 provides that the NEB shall cease to have the function to extend public ownership and promote industrial democracy or industrial reorganisation and gives it the new function of disposing


of assets to promote private ownership. Under the 1975 Act, the NEB was allowed to promote or assist
the reorganisation or development of an industry or any undertaking in an industry".
I would have thought it was vitally important to allow reorganisation to stay. As the hon. Member for Caernarvon says, reorganisation is essential, and to remain effective it must stay part of the powers.
On industrial democracy, I would have thought it was essential, in the present state of British industry, since the Conservative Government came to power, that workers should participate in the decisions of management. It is essential to have full involvement of employees at all levels of decision-making. Under the Government's existing industrial policy. not only are workers up in arms; according to the Financial Times today, a survey carried out by the Confederation of British Industry shows a continuing decline in business confidence and investment.
There is nothing to say that assets that are disposed of will not go to foreign owners. Not long ago the Shah of Iran was buying tanks and other war equipment produced in my area. If, at that time, the National Enterprise Board had been disposing of its shares to private ownership and the Shah had bought them, instead of buying tanks and ships, the Ayatollah could have been one of the biggest business men in this country.
I should like to refer to the extension of public ownership. If one has public investment, one should, surely, also have public accountability. My only criticism of the National Enterprise Board and the previous Government is that the NEB was not given enough lead. It should have been allowed to take more investment. I am looking for the right words.

Mr. Leadbitter: The National Enterprise Board was employing, through equity holdings in a number of companies, about 400,000 people before the Conservative Government began to tamper with it. More than that, with the encouragement of the Labour Administration it was beginning to have quite a successful impact in the Northern region. Is it not, therefore, a mistake for the Government to diminish its role and refuse to allow it to have industrial reorganisation

and industrial democracy functions, at a difficult time?

Mr. Dixon: I thank my hon. Friend for that intervention. I agree with what he says.
The words for which I was looking, before my hon. Friend's timely intervention, were "more risk investment". That is what is needed. That is my criticism of the previous Government regarding the National Enterprise Board.
I support the amendment. It would delete clause 1, which kills the National Enterprise Board, the Welsh Development Agency and the Scottish Development Agency.

Mr. Tom Benyon: I hope, Mr. Speaker, that my speech will be tempered with a degree of verbal continence. I am minded of what Pascal said:
If I had a longer period of time to prepare it, this speech would have been shorter.
I should like to thank publicly and congratulate my hon. Friend the Member for Christchurch and Lymington (Mr. Adley) on his efforts on behalf of Abingdon and MG. My hon. Friend has worked extremely hard and has been more than helpful to me as a new Member of the House over this extremely difficult subject.
I should like to relate to amendment No. 4 a constituency problem that concentrates my mind on a daily basis. One is clearly, first and foremost, a constituency Member of Parliament. The prospect of the MG car plant in Abingdon closing down is of great importance. Even though amendment No. 4 clearly has national repercussions, it is of great interest to my 1,100 constituents who are directly employed in the Abingdon works of MG and to many hundreds of people who work in small engineering firms in and around my constituency and make the parts that go inside the MG cars.
The Abingdon works and the work force have an excellent record in terms of labour relations, which are, and always have been, first-class. Their loyalty to the management of British Leyland has never been in question. The co-operation of union, management and work force has always been of a high order. It is in a unique situation in British Leyland.

As hon. Members will know, the golden jubilee of the making of the MG car occurred recently. The MG car is not simply another motor car. It strikes a chord with people throughout the world. I think that the British Leyland management was amazed at the degree of discord, annoyance, surprise and frustration felt around the world, certainly by the American dealer network, over the prospect of a car which is considered of great importance and the spearhead of American sales by Leyland being taken away without what was considered to be sufficient thought, research and discussion. I believe that British Leyland management was surprised by the emotion that arose in this country. It seems that the MG car has a romantic name. Perhaps many people have had romantic experiences in MG cars and have a romantic attachment to the car itself.

Mr. Hal Miller: My physique disqualifies me, but I was in love with an MG car.

Mr. Benyon: My hon. Friend makes an intervention clearly with some degree of experience. However, this issue is of great seriousness to my constituency.
I do not wish to give the House a guided tour of the traumas of the deal that is likely to take a while longer to be consummated between British Leyland and the Aston Martin consortium. The deal hangs in the balance, A fine product has a question mark over it—whether it is to be aborted, sold, or publicly mortified, leading to a loss of jobs in my constituency.
I recognise that a considerable amount of debate has taken place in the House on this subject. Many hon. Friends have signed an early-day motion. An Adjournment debate has also taken place. The strength of feeling in the House is significant. I do not wish, however, to underestimate the problems that confront the successful conclusion of a deal between British Leyland and any purchaser. Many problems have still to be resolved. Losses are running at £850 a car. The question that hangs in the air is whether someone in the private sector can necessarily make the car pay if British Leyland is unable to do so. That has yet to be answered.
The Abingdon works are part of a chain of manufacture. They cannot, in their own right, manufacture cars. This is well known. The manufacture of the MG car takes place in several stages. What those in my constituency do superbly is to put it together. The car is extremely expensive to make because it is unique and so good. I have no reason to suppose that British Leyland management is telling me a pack of lies. I have examined the matter in some detail. I believe that the management consists of sincere men who have done their sums. One can say what one likes about Sir Michael Edwardes. Many people do. I am convinced, however, that he can do his arithmetic. British Leyland also has plans which it has carefully worked out for the Abingdon works. They are part of its overall strategy for the revival of British Leyland.
There are many other problems in the deal. What is the marque name worth? What will be the cost of the parts manufactured by British Leyland that will still have to go into the car? Can any consortium that has been making only selective, high-cost sports cars make a mass-produced car? What is the whole operation worth? All those matters must be worked out in a commercial deal.
The decision must be made by Sir Michael Edwardes, his board and the potential buyer alone. This House cannot decide a commercial deal. It is not the function of the House to do so. I am sure that that is not what my hon. Friend the Member for Christchurch and Lymington is suggesting. We cannot become involved. Certainly I should not be in favour of any politicians or civil servants making such a decision. The history of such decisions is that they have resulted in the financial and commercial bomb sites. I have seen no reason why that depressing trend should be reversed now.
It would not be in the interests of the country, of British Leyland or, most important to me, of my constituents to exert so much political pressure on British Leyland that we force it to enter into a deal that makes no sense to it, or to me or my constituents. My comments are not meant to cast any aspersions on the offer now being studied by British Leyland, which I am led to understand has been received from the Aston Martin


consortium. I believe that that consortium has the expertise and the cash. It certainly has the enthusiasm to do the deal. But we cannot force such a deal through. It would be wrong to do so.
I do not use only MG as an example. Let us take another hypothetical case. If we forced a company to sell an entity, such as a car manufacturing plant, by exerting too much pressure, and the buyers did not have the expertise or the money, what would happen would not be in the interests of any of our constituents. The operation would doubtless collapse at some future stage. It would run out of money. If that happened in my constituency, the position would be worse than it is now. British Leyland proposes to reduce the work force from 1,100 to about 700. In the case that I have described, all the workers would lose their jobs. What good would that be? If we applied too much pressure, we should all be losers.
What the House should ensure is that no political pressures stand in the way of a nationalised industry, such as British Leyland, which has a plant which it believes is not commercially viable, concluding a successful deal with an outside buyer. That is what I want and what I should certainly support. I have no reason to suppose at present that there are any political obstacles in the way of concluding that deal.
What I want more than anything else is that MG should continue to be made in my constituency, that we do not one day hear of MG cars being made in Jakarta. They should be made in my constituency, where there has been a history of 50 years' satisfactory sports car manufacture. The MG is a British sports car. It is British-manufactured. Its reputation is unique and very high. The MG is as British as bowler hats and Mersey docks. We must make sure that it continues to be made in this country.
My hon. Friend's amendment clears the air. If there is any suspicion in my constituency, the country or the House that Leyland is dragging its feet, that it is being less than co-operative in concluding the deal—if it is a good and worthwhile deal—there is merit in the amendment, the most important part of which is the proviso that the buyer
is able to satisfy the Board of his intention and ability to continue the existing purposes.

Mr. Charles R. Morris: I should like to take up two of the four points made by my right hon. Friend the Member for Deptford (Mr. Silkin) when he moved the amendment, one dealing with industrial democracy and the other with the private acquisition of public assets.
I was encouraged by the general air of approbation on both sides of the House when my right hon. Friend talked about the desirability of promoting industrial democracy. Even the Under-Secretary, the hon. Member for Basingstoke (Mr. Mitchell), nodded in agreement. The hon. Member for Oxford (Mr. Patten) suggested that the previous Government had been slightly lethargic about industrial democracy, but one of that Government's signal achievements was an imaginative exercise in industrial democracy, which led to Post Office staff being appointed to the board of the Post Office. Along came a Conservative Government, and the chairman of the corporation immediately proposed that this imaginative exercise should come to an end and that the members of the Board representing the staff should be taken off the board.
The Secretary of State for Industry caved in. The scourge of the British Steel Corporation, of Rolls-Royce and of British industry generally caved in to the chairman of the Post Office Corporation and meekly accepted that that exercise should be brought to a speedy end. I do not recall the hon. Member for Oxford or the Under-Secretary objecting when the Secretary of State took that crucial decision.
Clause 1 contains a proposal to promote the private acquisition of public assets. It imposes an obligation on the National Enterprise Board to divest itself of investments and holdings in particular companies.
I want to say a few words about a company about which there has been Rome press speculation. My constituents who are employed by that company believe that if the NEB investment in it is sold off, that will provoke what they amusingly describe as the sale of the century. I refer to the prospective sale of the NEB's 50 per cent. controlling stake in Ferranti, a company with an annual turnover of £200 million and pre-tax profits for 1979 of £10 million.

Ferranti has an impressive record. It has made a significant contribution to the development of computer-assisted radar systems and computer control in factories. The Ferranti company is a leader in Britain in the development of lasers, semiconductors and microprocessors. The company has achieved great things in high technology. But it was the same company as was rescued from its financial difficulties by the National Enterprise Board in 1974.

I contend that before the question of selling the NEB's controlling interest in Ferranti arises, the 17,000 engineers, technicians and staff who have made the company's success a reality since 1974 should be consulted and that such consultation should be seen to influence the sale of Ferranti shares as contemplated under clause 1 of the Bill.

Seven thousand of the total Ferranti work force of engineers, technicians and staff are employed in Greater Manchester, and Sebastian Ferranti described them in the following words:
Not one of them backed off when we had our troubles and many hundreds of them have put in over 40 years' service.
Yet these people will not be considered at all, because the NEB is now under instruction to raise £100 million. Perhaps the Minister—if we are to believe today's press reports—will say that there will be a deferment of the timing for the raising of that £100 million, but the NEB is now under instructions to sell off its interest in companies such as Ferranti.

I believe that the staff who have made such a signal contribution to the success of the company should be consulted and allowed to participate in any discussions which concern the controlling interest of the company.

The possible sale of the NEB's controlling interest in Ferranti provokes many questions. At present, 60 per cent. of Ferranti's production is on defence contracts. To what kind of company will the controlling interest in Ferranti pass? Will it be to a foreign-controlled company? Will Ferranti pass into the control of a multinational company? Will it eventually be controlled by the four companies which, according to press speculation, are interested in acquiring control?

Will control go to Racal? I can understand the interest of that company in acquiring Ferranti's defence contracts. Perhaps control will pass to Plessey or GEC. Ferranti's success with defence contracts has been created to some extent by its efficiency in micro-circuitry. If control of Ferranti passes to GEC or Plessey, is it a possibility that Ferranti's micro-circuitry operations will be closed down and rationalised? Those are some of the major issues that should be considered by the House.

I am conscious that there are a number of ideas under consideration and that those ideas are the subject of speculation. I have read a suggestion that the Government are thinking of making 25 per cent. of the controlling shares available to the Ferranti work force. Is there any truth in that speculation or will future control of the company be so organised as to leave it in the hands of the Ferranti family?

The investment of the Ferranti family was saved by the National Enterprise Board in 1974 and the family is now sitting on what I would call a financial bonanza. These are important aspects of divesting the NEB of its stake in certain companies. The Government might take refuge in the view that decisions on these issues should be left to the NEB. I can tell the Minister that if the sale of the controlling interest in the company provokes redundancies and unemployment, my constituents who work for Ferranti will not forget the role played by the present Government.

Mr. James Hill: It was my privilege to serve on the Committee for the Industry Bill and to listen to the same arguments as we have heard today. The right hon. Member for Deptford (Mr. Silkin), the hon. Member for Whitehaven (Dr. Cunningham), my hon. Friend the Member for Basingstoke (Mr. Mitchell) and my hon. Friend the Member for Edinburgh, North (Mr. Fletcher) were four of the most charming people to whom I have ever listened in debate. The Bill is emotive, but they were so able to merge their thoughts on the issues that the Bill enjoyed a series of smooth sessions in Committee, which enabled us to complete our deliberations in a short time. I think that the right hon. Member for Deptford has always maintained an amiable pose while telling some of the


biggest whoppers about the NEB that it has been my privilege to hear.
The NEB, which became such a fiasco, was the brainchild of the then Secretary of State for Energy—the right hon. Member for Bristol, South-East (Mr. Benn). He decided that he did not simply want an industrial conglomerate posing as an aid to industry but that he also wanted a body that would, in his words, help
industry in the public sector to change the power structure of our society.
Following words of that kind, there was bound to be hostility to the concept of the NEB, though I do not think that the NEB has no future. However, the right hon. Member for Bristol, South-East barely gave the NEB a stillborn chance of surviving a change of Government.
We often bring forward legislation that we know must die as soon as a Government are defeated. We are then back at the beginning. Progress stops and no plan is formulated to ensure that such legislation can survive and be useful over a period. No one can change the power structure of our country in the lifetime of a Government. The NEB was given little or no chance of survival. That was a shame.
The NEB was stuffed with money. Any investment manager for an insurance company would know that to be given £1,000 million—I am talking of 1975—and then to be told to invest it—in order to help ailing industry in particular—in the regeneration of industry was an impossible task. The NEB was bound to fail with such guidelines. So it was. Not only was there failure within the board to invest so that it could always at least show a modicum of prifit; it had to get the money out to prove to politicians that the NEB was working.
There were conflicts with the boards of other industries. We all know about the Rolls-Royce affair, and now we have the British Leyland affair. Boards that consist of men of great ability will clash over matters of principle, certainly over the financial structure of a company or the funding that is needed for the next three years. Whenever there is a clash, personalities are brought into it.
One of the emotive issues that hit the Committee was when, at our second or third sitting, we heard that the whole of

the NEB board had resigned. We heard that the board members had resigned as a result of some sort of conflict with Rolls-Royce, but my understanding is that they felt that they were justified in resigning because their portfolio was being reduced. It is obvious to me that their portfolio was not reduced by the hiving off of Rolls-Royce, because there was a separate budget for that and it would not have deterred the NEB from helping ailing industries, as before.
It could still have helped the Ferrantis, ICLs and any other companies that wanted assistance. But no; members of the board took it into their heads to resign on that date. It may have been prompted by the existence on the board of members who were almost political nominees. That was a mistake, and I hope that my right hon. Friend the Secretary of State will not make the same mistake. To have political nominees on a board that has to survive a change of Government is obviously a mistake. Discretion must always be the word.
The board of the NEB—consisting as it did of well-intentioned people—had a disastrous record. We all know of the Hivent company, which went bust. We know that Sinclair Radionics lost £2 million. We all know that Herbert and Cambridge Instruments lost a great deal of money. Power Dynamics also lost a great deal of money and British Tanners lost £5 million. It has been said that the NEB's record last year included five companies that went into receivership. I do not know whether that was caused by inflation or whether the general world recession had caught up with them.
If the sole purpose of the NEB is to buy up companies and to aid them, it should at least project those companies' profit margins, figures and order books for the next three to five years in order to ensure that it is not putting money into something that must fail. I quite agree that the NEB must take risks—it is in the small risk-taking business. But, having said that, I must point out that the board's record began to get horrific.
The hon. Member for Jarrow (Mr. Dixon), who is one of the best Labour Back Bench speakers that I have heard, is bitterly disappointed. In fact, he calls this Bill the NEB (Abortion) Bill, the Scottish Development Agency (Abortion) Bill or the Welsh Development Agency


(Abortion) Bill. If I had a constituency such as Jarrow, I, too, would begin to think that it was time for despair. But the hon. Member must look further ahead than his emotions will allow him to do at present. The Bill is still there; the NEB and the two agencies are still there. Admittedly the cash flow is slightly halted—but only by a mere fraction; it has not been ruthlessly cut out. Certainly, the hon. Member should keep putting forward the arguments of the Opposition that more money is needed in certain specific areas, but he should approach this matter with the attitude that there has been no abortion and that the NEB still lives and will probably live longer in its modified form than it otherwise would have done. I think that he can take heart.

The Secretary of State has been accused of many things, but he said on 19 July last—and we would all agree with this—that the merchant banking functions of the NEB should be ended. It is quite clear that we have a perfectly adequate banking system for dealing with companies that want to expand and progress. My right hon. Friend said on that occasion that he wished the NEB to realise some of the shares. That is only fair. Why should we go without hospitals or educational equipment when there is money in the NEB to be plucked out? This would do no harm to industry. My right hon. Friend is quite right in trying to raise £100 million from the assets of the NEB. Any sensible person running even a home knows that once in a while something is sold off in order to provide the family with a certain quality of life. That is what is happening with the NEB shares.

The problem over regional policy is not in this group of amendments, but we had an excellent debate about it in Committee. We all felt better after the debate. There has been a bit of despondency about what some people call the rundown of the NEB. I call it a clarification of the situation of a board that must survive a change or changes of Government. We must have an industrial programme for the next 10 to 15 years. Both major parties and even the Liberals must agree on an industrial performance for this country. If we do not do that, we shall have nothing.

Mr. Stuart Holland: So far in this debate we have had yet another chapter in the comedy of errors of the Conservative Party. We have already had Conservative Members referring to the fact that they regretted the dissolution of the Industrial Reorganisation Corporation, as well they might. In 1972, after its abolition, the Tory Government introduced an Industry Act with wide-ranging powers—far wider in their effect than those of the IRC. We can anticipate that there will be yet again a change of direction in Government policy as they realise that the comedy of their errors, in their changing and chopping of policy, gives way to tragic consequences for the British economy as a whole.
On purely ideological grounds—the most dogmatic of grounds, in fact—this Government, or that section of the Conservative Party that controls them, are convinced that public enterprise intervention is, of itself, Socialist. They have not grasped the fundamental fact that Governments of the Left, Right and Centre in continental Western Europe have intervened in the ownership and control of the same sectors and the same firms as those in which the Labour Government intervened the last time round. For example, one should look at the intervention of the Italian Government in the Industrial Reorganisation Institute and the State Hydrocarbons Corporation in Italy.
We should also look at the National Investment Company in Belgium, where Christian Democratic influence is strong. We should look at France under the Gaullist Party and under Giscard d'Estaing, where there is an Industrial Development Institute. In Germany, major extension of public enterprise has been seriously considered in the United Industries Company. Three of the most successful car companies in Western Europe—Volkswagen, Renault and Alfa Romeo—are under public control.
The irony is that in aiming to "privatise" the public sector, and in aiming to sell off or asset-strip resources in the National Enterprise Board, the Government are proving that they have been hijacked by the godfather of the new Chicago gang—Milton Friedman—and the kind of philosophy that he has been arguing in pamphlets of the Institute of Economic Affairs. I am delighted that the Secretary of State for Industry is present.


I understand that such pamphlets from the institute are widely recommended reading in Government Departments.
The philosophy in those pamphlets is reflected ideally, in a mirror image, in the opening clauses of the Bill. Professor Friedman advocates that the Government should reduce the share of the public sector in the economy by selling off the assets of existing public enterprise. He does not take into account the structure of public enterprise in the Western European economies. I have not found one reference to the structure of these enterprises in any of his works.
In the British economy, including the holdings of the NEB at present, the share of public enterprise in the overall supply of goods and services in the system is only around 15 per cent. of GDP. That is paralleled throughout Western Europe, with the partial exception of Italy. If we look at the structure of public enterprise in Britain in relation to West Germany, we find that West German public enterprise represents a higher share of GDP than does British public enterprise.
We can see, therefore, that if there is a selling of the assets of public enterprise the Government will be stepping out of line not simply with the policies of the Labour Government in the 1970s but with policies which other Governments of the Centre and of the Right in Europe have been pursuing as a conscious policy of intervention in industry over 20 years.
We must also seriously consider the consequences of the selling of assets of public enterprise in the NEB case against the background of the reasons why such Governments to the Right or Centre have brought private enterprise into public ownership since the war. One of the most fundamental facts—I regret that it was lacking in the arguments of the hon. Member for Bury St. Edmunds (Mr. Griffiths) and of the hon. Member for Southampton, Test (Mr. Hill)—is the patent divorce between finance capital and industrial capital in key projects, and in key sectors of the modern capitalist economy.
There are certain areas of the system in which major investment is necessary before there can be any kind of pay-off. For example, the time horizon for planning in steel—for any Government who

look shorter than a purely accountant's view of the 12 months ahead—should be not less than 20 years. The time horizon for the forward planning of a motor vehicle, between its conception and its phasing out after production, is around 15 years. There is a lengthening time horizon for major investment planning in electronics, with a rapid shortening of the production period in which the investment will be paid off. In other words, there is a double penalty. It takes a major entry ticket of about £1 billion to get into certain sections of the electronics market and major forward planning for years for products which in themselves may have a very short life.
We must view—as Governments abroad have done—the forward planning of increased scale and risk in new sectors and traditional sectors of the economy, through public as against private enterprise. When we look at those sectors throughout Western Europe, we find that the State has intervened to underwrite the risk and the scale of the investment which the private sector has patently failed to take.
A clear example is that of British Leyland, which has dominated the NEB to date. It is no accident, and it is central to my argument, that in the early 1970s Lord Stokes protested that the "rational" stock market of this system, according to its short-term profit logic, valued the whole of British Leyland—employing one-fifth of a million workers—no higher than one empty office block in London, the Centre Point building. Lord Stokes castigated the divorce between finance capital and actual industrial investment. It was Lord Stokes, not a Member for one of the Bristol constituencies, who said that unless there was a massive injection of money into the British motor industry, the derivative and supplier industries of components—rubber, glass and steel—would be seriously affected.
The Government are taking a purely financial view, serving the interest of finance capital, with which many Conservative Members are closely connected, rather than realising that the problems of investment in industry are not simply a matter of the personal incentive of entrepreneurs or the alleged climate of activity in the system as a whole but are related to the changing problems caused by new technology, a larger minimum scale of investment and massive entry and exit costs from industries.
The hon. Member for Bury St. Edmunds claimed that firms were being blown by winds of political decision-making in the changing of grants and aids for regional development. He seems to be totally unaware of the evidence produced by the Expenditure Committee, which studied regional investment grants and regional incentives, that such aids exerted next to no effect on the actual location decisions of leading enterprise within the system. The enterprise was concerned about the kind of guarantee of pay-off for a long-term investment project. If it was sure that there would be such a pay-off, it would undertake the investment. The problem now is that the lengthening time horizon of investment from 5, to 10, to 15 years spans longer not only than the lifetime of any individual Chancellor of the Exchequer or any individual Secretary of State for Industry but longer than the lifetime of Governments. It means that these companies cannot undertake the risk of long-term investment unless it is publicly financed and publicly supported.
The proposal to "privatise" these assets will also have perverse effects for the Government in terms of their committed economic philosophy. In practice, companies in the private sector which buy up subsidiaries will be using resources which should be going to investment rather than to asset acquisition. The Government have told us a great deal about the pre-emption of resources in the system and of how we must cut back spending on housing, health and education in order to release funds for investment in industry. Why are they pursuing a policy that will lead to a transfer of resources from the private sector to the Exchequer without any net investment? Why are they pursuing this squalid exercise in asset-stripping instead of underpinning the investment projects of major producers by showing that the public sector is committed to those areas and by relating the investment plans of leading companies and industries? That matter will be discussed further in terms of other clauses and amendments, and it is a matter to which many hon. Members will return.
It is clear that the Government have a false view of the functioning of the modern capitalist economy. They have not grasped the nature of the overall industrial

problem in the system. The view from the boardroom is mainly a view of the financial behaviour of a company and rarely a view of how that company relates in terms of real risk and potentiality to the rest of the system. It is a business man's view; it is running the economy as a super firm rather than realising that the economy has to be run by other criteria if firms are to make money.
It is the business man's view, expressed in the "home economics" of some Conservative Members—the "household budget"approach—that we cannot run a deficit on any account, because if we do we are spending more than we earn. They do not ask the crucial question whether the massive finance available in the private sector will be invested over the 10 to 15 years in which we have some protection from North Sea oil. If the Government do not pursue policies of public intervention, they will run major risks.

7 pm

The hon. Member for Southampton, Test said that the NEB was set up against the background of a call by a former Secretary of State for Industry for a power shift in society. That former Secretary of State is not the only one who has claimed that we need such a power shift. When the Labour Party was proposing the establishment of the NEB, a leader in The Times in 1973 said that the country needed at least £2 billion a year invested in a national investment board which should effectively pursue its investment over at least a 10-year period. The Times said that only public funds injected over a long-term time horizon had a chance of turning British industry round and reversing the industrial decline of the economy.

Mr. John Patten: I take the hon. Gentleman's point about the length of time during which one has to evaluate investment decisions. He referred to 15 to 20 years for the steel industry, but does he not agree that since 1967 we have had nearly 15 years in which to evaluate some of the investment decisions in the steel industry which seem to have resulted in over-investment, because of other criteria, rather than under-investment?

Mr. Holland: I am delighted that the hon. Gentleman has asked that question, because it enables me to refer to the facts


of productivity in nationalised industries. If one considers the 1960s and early 1970s, when investment in gas and electricity under public ownership during the 1950s had had time to take effect, one will see that productivity was uniformly higher in those sectors than in manufacturing industry. [HON. MEMBERS: "What about steel?"] Conservative Members must get it straight. I know that their memories are short, but they ought to rememeber that for most of the 1960s steel was under private ownership and exactly fulfilled my point. If we invest public funds in an industry, we cannot expect rationalisation to take place overnight. Conservative Members are giving us a perfect example of their financial accountancy approach to major investment programmes.
I should also make it clear that the losses incurred by public enterprise in the early 1970s were caused by the then Conservative Government's policy of consciously restraining prices charged by public industry as part of the falsely based counter-inflation policy. The productivity of an industry cannot be measured simply by its cash profits.

Mr. William Waldegrave: The hon. Gentleman is, of course, the true and only begetter of the NEB. He escaped from the question of my hon. Friend the Member for Oxford (Mr. Patten). Of course productivity was high in the gas industry—they just put a pipe in the ground and out came the gas.
We must look at the decisions that involve attempts at long-term planning of industrial projects, such as Concorde and the AGR. Wherever Governments have intervened in such projects, the result has been disastrous.

Mr. Holland: Conservative Members cannot have the argument both ways. I am glad if they now admit that productivity in the broad range of nationalised industry was higher than in private enterprise. The hon. Member for Bristol, West (Mr. Waldegrave) said that it was obvious that productivity would be high in the gas industry. That is corroborated in one respect by a former Conservative Prime Minister who has been rather neglected by his party recently. Baldwin said that nothing was more obvious than that public utilities such as gas and electricity

should be taken into public ownership and control rather than leased to private enterprise at monopoly rents.
At the rate that the Government are going in privatising the NEB, which will not solve our industrial problems, and selling NEB assets, the public may ask where they intend to stop. Are we to see the sale of gas and electricity assets in order to reduce the public sector borrowing requirements with which the Government are falsely obsessed? They do not understand that the PSBR is not a drain on resources in itself. It depends on what one does with the public money.
Many of us feel that the proposal to sell the assets of the NEB on a short-term cash profit basis is a pure accountancy exercise by the Government.

Mr. Tom Ellis: I agree with much of what my hon. Friend has said. Does he agree that if there is a drawback to public ownership it is the capriciousness of political intervention? One of the major purposes of the NEB was to establish an arm's length relationship between publicly owned enterprises and the Government. That virtue of the NEB is being reversed by the present Government.

Mr. Holland: I agree with my hon. Friend in one respect. The evolution of agencies such as the NEB in other countries has shown that Governments abroad, irrespective of their political colour, appreciate that the private sector has failed to invest in key areas of industry and services and that the public sector needs to intervene to do the job.

Mr. Hal Miller: I shall leave my hon. Friend the Under-Secretary to deal with the bizarre notion of the hon. Member for Vauxhall (Mr. Holland) that there is a fixed quantum of public investment applying to all capitalist economies and that we are failing in our duty if we do not reach that standard. No doubt my hon. Friend will also ask the hon. Gentleman about the use made of investment. I understand the hon. Gentleman's point about the need for an industrial infrastructure, but that is exactly what the Government have supported by the continuation of the provision of money for, to take two obvious examples, the steel industry and British Leyland.
I shall say no more about the hon. Gentleman's speech and turn, in the


interests of brevity, to amendment No. 4, the case for which was so tightly argued and interestingly presented by my hon. Friend the Member for Christchurch and Lymington (Mr. Adley).
My hon. Friend the Member for Abingdon (Mr. Benyon) referred to the MG case striking a wide chord. I think that the amendment struck a wide chord, which resonated on the Labour Benches. I am not a lawyer, not even a lower-deck lawyer—perhaps the right hon. Member for Deptford (Mr. Silkin) will be able to construe the matter for me—but, as I read the amendment and the 1975 Act, it seems that the limitation that the amendment seeks to propose is capable of a much wider interpretation and could pave the way for the activities of the NEB to which many of us object and which cannot be justified even on the thesis of the hon. Member for Vauxhall that there should be investment in public industrial infrastructure. Some of the forays undertaken by the National Enterprise Board—indeed, one can think of Thwaites and Reed and other examples—so notably illustrated by my hon. Friend the Member for Chertsey and Walton (Mr. Pattie) had nothing to do with industrial infrastructure whatsoever. One can think further, of British Tanners.

Mr. Stuart Holland: My argument is not that public enterprise was restricted to infrastructure and public utilities in Western Europe but that the very institutions that I began by citing, some of which similarly employ between one-quarter and one-third of a million people, are beyond the basic framework of basic industry and services and into modern manufacturing, like the National Enterprise Board.

Mr. Miller: It is a little difficult to conceive of British Tanners as an enterprise in modern manufacturing. Indeed, it is regrettable that this venture went into liquidation and that private businesses—those that had not been wrecked by intervention in the first place—had to come and pick up the bits, which is largely the purpose of my hon. Friend's amendment, as I understand it. I think that he has opened the door much wider than he intended, because the purposes

in section 2 of the Industry Act 1975 refer very much to
the development or assistance of the economy
and
the promotion in any part of the United Kingdom of industrial efficiency
and
the provision, maintenance or safeguarding of productive employment",
which is the bait to which the hon. Member for Caernarvon (Mr Wigley) was rising, because he suddenly saw in my hon. Friend's amendment a way of preserving enterprises in Wales that were perhaps no longer profitable and in some cases—I think that the right hon. Gentleman took this point—preserving enterprises from the NEB itself, which has been known to indulge in concentration—and we can think again of British Tanners.
I think that my hon. Friend would agree that he has opened the door very wide indeed. It is not in consonance with the principles that we uphold on the Government Benches and it could do very grave damage to private enterprise. Perhaps he would consider the current situation, where a bid is due for a Decca manufacture. Is it conceivable that either Racal or GEC would be willing to allow somebody to take over the radar manufacturing assets of Decca and continue to manufacture radar sets in that plant in competition with themselves? The whole presumption is that by concentrating the manufacturing in the plant they could do so more effectively. I suspect that they would not be willing to let somebody use the equipment for the manufacture of such plant, or the patents or even the brand names, so how is it that the National Enterprise Board is to apply a different set of criteria to such a situation? I think that this needs further consideration.

My hon. Friend the Member for Abingdon referred to the possibilities of romantic experience in an MG car. I am sorry to say that I am disqualified by physique from indulging in such an experience, but I did have a love affair with an MG car, if not in an MG car; it was the first vehicle that I was proud to own, and I wish that the expansion of my family and the acquisition of a dog and a cat and


other impedimenta did not prevent me from again riding in an MG car.

The argument is spread far wider than MG itself, but I wish to take up the point that my hon. Friend made, because he has played a leading role, and referred to the great kindness that he had been shown. I detected faintly that perhaps at some stage he had even been embarrassed by the great kindness that my hon. Friend the Member for Christchurch and Lymington had shown him, because the difficult question here is, largely, what is the future of British Leyland itself? What any purchaser of the MG asset has to consider is whether the supply of the necessary components will be forthcoming.

Perhaps I may give my hon. Friend some reassurance. When I checked with the chairman of British Leyland today, I received the assurance that the offer by the consortium had been received, but only as recently as last week, that a reply would be given within a fortnight and that it would be considered on a commercial basis and on no other basis. I hope that that will give some reassurance to those like myself who have a fond recollection of and a firm belief in the virtues of the machine.

A cloud is cast over the whole scene at present by the announcement today of the findings of the AUEW team investigating the circumstances of the dismissal of Derek Robinson. I very much hope that right hon. and hon. Gentlemen on the Opposition side of the House will not be misled into trying to drum up support for any unconstitutional action by Derek Robinson—

Mr. Leadbitter: On a point of order, Mr. Deputy Speaker. With great respect, even with the flexibility that is generally allowed, is not the hon. Member deviating too far from the amendment?

Mr. Deputy Speaker: We were waiting to hear what he was saying.

Mr. Miller: I was going to content myself with saying that Mr. Robinson has a perfect remedy under the law if he considers that he has been unfairly dismissed, and that is to take his case to the tribunal. There are no grounds for him, like Samson, blindly pulling down

the whole temple around him when there is a perfect legal remedy available. I hope that that will be accepted on all sides of the House.
In conclusion, I ask my hon. Friend again to consider his amendment very carefully, and further to consider whether his purpose would not be met by subsection (1)(b), where the following is to be added:
promoting the private ownership of interests in industrial undertakings by the disposal of securities and other property held by the Board or any of their subsidiaries.
I ask him to consider whether that paragraph does not meet his case absolutely—although I well understand that he wished for a peg on which to hang his argument, and I have complimented him on the felicity with which he argued his case.

Mr. Adley: I can see that the words in paragraph (f)
held by the Board or any of their subsidiaries
could wisely have been added to my amendment to make the position clearer. I am grateful to my hon. Friend for his suggestion.

Mr. Miller: I had concluded my remarks, but I am grateful to my hon. Friend for his clarification.

Mr. George Park: The Government are acting as though the Bill was already on the statute book. I refer to the stripping of the NEB assets, not currently a function of the board. I am not suggesting that they are doing this in a secretive way, because in Committee on 4 December the Secretary of State said that it was always clear that there would not be much time after the passage of the Bill into law for the NEB to sell its assets before the end of the financial year. But the NEB, having been warned, is no doubt making its preparations to identify and consider which assets it will sell. We understand that the Secretary of State has since backed off from that situation.
I should like to relate the stripping of assets to Alfred Herbert, the machine tool company. This company, once again, for the ninth time, is in the process of reorganising. As on previous occasions, this has been accompanied by the redundancy of several hundred of its workers. This has happened under a new chairman, appointed by the Secretary of State.


We are told that it is necessary to sell off the profitable parts of Alfred Herbert to acquire a lump sum—for which the company is not prepared to go to the NEB—in order to continue to research and develop high technology machines in the part of the company that is running at a loss. I am at a loss to understand the logic of such an approach. I cannot understand why one should sell off the parts of a business that make a profit in order to sustain the part that does not.
I am equally worried about the impression created by the new chairman and the managing director that the money from the sale of assets will be used to develop a new family of high technology machines. The reason for my doubts is outlined in the new guidelines:
The Board will be allowed to retain and reinvest some part of the receipts from the sale of certain investments, to be determined by the Secretary of State from time to time.
The Bill goes further. It states that any sums received by the Secretary of State from the disposal of property
shall be paid into the Consolidated Fund.
The Minister asks for supreme sacrifices to he made, because he asks workers to lose their jobs to provide a lump sum for research and development. The Secretary of State has said that he will support the development of high technology. Yet Alfred Herbert, an NEB company, is not prepared to go to the NEB. It prefers to sack 700 highly skilled people. I have no doubt that the company will end up with an unbalanced labour force and that it will seek desperately to regain that labour force in order to survive. We are entitled to a clear reply from the Minister on that matter.
If the profitable parts of that company are sold off, will it have the right to retain the money gained for research and development?
The chairman was appointed by the Secretary of State, and he has the same philosophy as the Government. He is determined to do his bit to make private those parts of industry which should be left under the NEB.
It was suggested in Committee that industry would flow into the areas where the infrastructure was provided. That infrastructure has been provided in Coventry. There are communications,

schools and a highly skilled labour force which is prepared to work in all types of industry. However, progressively, we are going further and further downhill.
I turn to the question of industrial democracy. The Government take the attitude that it is no longer the NEB's responsibility to encourage industrial democracy. They believe that industrial democracy has not been used sufficiently and that the principle should be removed from legislation. Conservative Members shed crocodile tears about industrial relations. They fail to realise that many industrial disputes arise because of a lack of information on the shop floor about what is happening to the jobs in which workers invest their labour and lives. The workers are entitled to know what is happening.
It is proposed that Ferranti should be sold off. Have the Government considered consulting the workers who have supported that company through thick and thin? They should have the opportunity to say whether they want to continue as they are or to work for an unknown private owner.
I shall end there, because I want my hon. Friends to have an opportunity to take part in the debate.

The Under-Secretary of State for Industry (Mr. David Mitchell): The debate was opened by the right hon. Member for Deptford (Mr. Silkin). He dealt in interesting detail with his view of the Government's industrial philosophy and that of his party. I hope that the House will find it convenient for my right hon. Friend the Secretary of State to reply to that speech. I shall deal with the details that have arisen in the debate. My right hon. Friend has a detailed account of what was said by the right hon. Member for Deptford and I have taken notes of what took place in the general debate. I am intervening, not winding up.
The right hon. Member for Rutherglen (Mr. MacKenzie) was an Under-Secretary of State and Minister of State at the Scottish Office. He recognises the limitations and problems. We share an understanding of the realities and problems involved in running a small business. The right hon. Member sought an assurance that the Government were


still concerned about Scotland's problems. I give him that assurance.
The right hon. Gentleman suggested that the present Government were responsible for a series of measures which are not helpful to small businesses. He said that the Opposition did not increase minimum lending rate. I agree that the Opposition did not increase minimum lending rate, but they were responsible for leaving the money supply largely out of control. They planned a £3,500 million increase in Government expenditure. As a result, we had to take the necessary steps to rein back on the economy. It ill befits Opposition Members to complain about our having to take the steps which were made necessary because of the legacy which they left us.
The right hon. Member for Rutherglen drew attention to the importance to Scotland of the microprocessor industry. I agree with him. The present microprocessor revolution can be compared with the Industrial Revolution. It was not the people who invented or manufactured steam engines who made the money out of the first Industrial Revolution; it was those who invented a multitude of applications. In exactly the same way, it will be those who invent, search out and apply a multitude of applications for the microprocessor, many of them small firms, who will grow in the future as that industry develops.

Mr. Grylls: I follow what my hon. Friend has said about the microprocessor. Could he give the House any news about the Government's attitude to Inmos? He rightly said that the application of microprocessors is far more important than actual manufacture of them which is already being carried out by so many different companies. Could he tell us whether the Government will finally say "No" to more taxpayers' money being put into the subsidised production of microprocessors by Inmos?

Mr. Mitchell: I am sorry to disappoint my hon. Friend, but it is not for me to make an announcement. That matter is still under consideration, and when an announcement is made I am sure that it will be made by my right hon. Friend the Secretary of State.
I want to refer back to the important area of the microprocessor with the assurance that what I say applies also to Scotland. As the right hon. Member for Rutherglen will know, a training programme has been started by the Department of Industry. We expect that that will increase the number of course training places from 2,000 a year to no less than 35,000. That will make a substantial difference to industry's ability to apply the microprocessor, because it will have the skilled manpower.
There is also the microprocessor assessment project where we make available up to £2,000 to assess whether a microprocessor application belongs in a particular area. Thirdly, after that, where there is a recommendation to go ahead, we are prepared to make grants of up to 25 per cent. towards implementation costs. That is a considerable area of investment of public effort in microprocessors. Specifically in relation to Scotland, the Scottish Development Agency is carrying out a special research project jointly with the Stamford research institute. No doubt, when we have the results of that the right hon. Gentleman will receive a copy.
I turn now to an important point raised by the right hon. Gentleman about the need for mobile projects to go to the areas of worst unemployment. I fully understand and sympathise with those who are unemployed. I recognise that there are areas of deep structural unemployment that have existed for years and years, going right back to when we first had a policy in the 1920s and 1930s.
Regrettably, we still find that the same areas exist in Scotland, Merseyside, Newcastle and elsewhere. The right hon. Gentleman wants mobile projects to be encouraged to go to the worst areas, and that is why we have made changes whereby the special development areas, instead of having a 2 per cent. advantage over a development area, have a 7 per cent. advantage. That means that they stand out as relatively more attractive areas which, I believe, will help to make an impression on a deep-seated structural problem about which the right hon. Gentleman cares as much as I do.

Mr. Charles R. Morris: I do not question the Ministers sincerity, but, if he really believes what he has just said, is he now going to instruct that the Inmos


factory should be located in a development area?

Mr. Mitchell: The management of Inmos has made known its preference for where it would like that project to be sited. The management pointed out that it is necessary to have the factory near the company's original advanced technology activities. That is a matter on which the management of Inmos made known its feelings. It is not for me to deal at this stage with the wider implication the Minister's sincerity, but, if he tions that there may be in the area to which the right hon. Member for Manchester Openshaw (Mr. Morris) has referred.
The right hon. Member for Rutherglen spoke about the shortage of mobile projects. He was absolutely right. There is a shortage. There has been a substantial contraction in the number of mobile projects available, both internationally and nationally. For that reason, I think that both he and I would agree that it is more important to concentrate attention on home-grown local start-up projects which can develop as a small business grows into a significant employer in an area. Now is not perhaps the moment to have a debate about the policy of the Government on small firms. I should be delighted to have such a debate at the Dispatch Box on another occasion. However, I can assure the right hon. Gentleman that the SDA has a small firms division, and David Ogilvy, whom I have met and for whom I have immense respect, plays a significant part in that area.
My hon. Friend the Member for Southampton, Test (Mr. Hill) made a very thoughtful speech and drew attention to the fact that State enterprises are not always successful and stressed the value of the private sector in its merchant banking role and its role of bringing about change in industry.
I am sorry that the hon. Member for Vauxhall (Mr. Holland) is not in the Chamber at the moment. In his great concern about the ownership of industry, he has failed to recognise that when making international comparisons it is not a matter of ownership so much as the ability of management to be allowed to manage that is important. That is something that the hon. Gentleman tended to overlook.
I turn to the special plea that was made by my hon. Friends the Members for Abingdon (Mr. Benyon) and Christchurch and Lymington (Mr. Adley). They tabled amendment No. 4 and expressed deep concern about the problem of the MG plant. My hon. Friend the Member for Christchurch and Lymington does not want the NEB or a company to be the sole arbiter of the national interest. I think that he will recognise that there is some conflict between our philosophy of seeking to allow commercial decisions to be made by companies in the commercial field and the concept of the Government constantly seeking to intervene to arbitrate in the way in which he asked.
I recognise that my hon. Friend gave voice to the widespread interest and concern about the problems with and interest in the MG motor car. My hon. Friend the Member for Abingdon laid great stress on the importance to his constituency of this car. He said—I think rightly—that it strikes a chord not only with the workers but an emotional chord with many people halfway across the world who, at one time or another, have felt the emotional and romantic pull of such a car. However, he recognised the reality that the Abingdon factory is only part of the chain and that we are dealing with an immensely complicated decision which British Leyland will have to take. It cannot be right, as he said, for the House to seek to intervene in a commercial deal. But the inevitable consequence of passing the amendment would be to intervene in the commercial judgment between the NEB and a company which it owned.
British Leyland has announced that production of the MGB model will be discontinued at the end of 1980 or early 1981. The company will stockpile for the United States market to follow after that, until a successor sports car based on the Triumph takes the place of the MGB. British Leyland is losing more money than was thought. I was asked for the figure. It is just over £900 for every car that is sold in the North American market.
There is the consortium to which my hon. Friend has referred, led by Aston Martin, which has made a bid, which would, I understand, continue to produce the old model for some time but would need inevitably to have to follow it with a new model at some stage. That bid


was received by the company only last Friday. Therefore, it would be quite wrong for us to seek to intervene in the commercial judgment of British Leyland. Indeed, I believe that it would weaken British Leyland's negotiating position if we did that. It must be a commercial decision, one in which taxpayers' assets are involved. It would be quite wrong for us to weaken the hand of those who are seeking to negotiate.
However, I go a little further and draw my hon. Friend's attention to the consequences of his amendment. I think that there are two consequences which he has not appreciated. The first is that if a company owned by the NEB decided to build a more modern plant, perhaps nearby, perhaps in a special development area, and inevitably it geared itself in its marketing to the new plant it was going into, it would then be necessary, under the amendment, for the company to offer for sale the old plant. Therefore, it would then have its direct competitors setting up in competition with it and killing the very reason for having opened up a new plant and carried out the investment in the first place.
My hon. Friend the Member for Bromsgrove and Redditch (Mr. Miller) drew attention to the even wider and more unfortunate consequence of accepting the amendment, because the terms in which it is worded would lead to the provision that, whenever any person or company anywhere in the United Kingdom envisaged closing any sort of factory or changing its use, the NEB would be expected to try to ensure that the factory was offered for sale to anyone, without regard to price or any other consideration, provided only that the buyer could satisfy the NEB that he would keep it open. Then, when it went bust, it would be open to the same system going on again, with a hapless NEB having to find another buyer.
I can give my hon. Friend no satisfaction in terms of the amendment and the words in which it is phrased. I hope that he will feel able not to press it. But I can give him and my hon. Friend the Member for Abingdon the assurance that their concern and the matters raised in this debate will be drawn to the attention of British Leyland. I hope that on that basis my hon. Friend the Member for

Christchurch and Lymington will not seek to press his amendment.

Mr. Adley: If my hon. Friend is telling me—I shall accept his word for it—that my amendment as drafted would extend the NEB's powers beyond companies held by the board—that is what I understand him to be saying—that is totally alien to the spirit of the amendment. Is that what he is saying?
Secondly, I should like an assurance—I think that my hon. Friend may have just given it, but I should like it in terms—that he will bring to the attention of the chairman of the NEB the strong feelings that will arise in this House and elsewhere if any artificial barriers are erected against the sale of MG, be it to Aston Martin-Lagonda or anyone else. Many of us would find artificial barriers quite unacceptable and contrary to the national interest.

Mr. Mitchell: I think that my hon. Friend will have sensed some uneasiness among his hon. Friends when there was enthusiastic support for his amendment from Opposition Members. I regret to say that he is correct in his concern that it would have the effect of widening the role of the NEB—far wider than Opposition Members ever intended in their wildest dreams that it should be. I hope, therefore, that my hon. Friend will not wish to press an amendment which would be so embarrassing to him.
The hon. Member for Coventry, North-East (Mr. Park) stressed the advantages of Coventry in terms of its infrastructure. I pay tribute to the way in which he constantly draws attention to the opportunities which his city has to offer for industry moving to it.
The hon. Member raised the matter of Alfred Herbert. I am afraid that he is under some misapprehension. He said that Alfred Herbert's chairman was appointed by the Secretary of State. That is not true. It was an NEB appointment. The Herbert management decided and the NEB agreed that the only hope for the company's future lay in rationalisation. This is now in hand. The consent of the Secretary of State was not required. He merely noted the proposals. The NEB was acting within the existing law and guidelines laid down by the previous Government, and the action, like previous rationalisation of Herbert under the


previous Administration, has no regard to the provisions of the Bill or the new guidelines which go with it.

Mr. Park: I should like the Minister to state clearly whether Alfred Herbert will be able to retain this money. Also, will he take into account the fact that people are not only being asked to give up their jobs or being compelled to give them up but are being told that there is to be no redundancy money beyond the legal minimum, in spite of the fact that management representatives have always departed with a golden handshake?

Mr. Mitchell: The question of redundancy pay is a matter for the management of the company concerned. But on the wider question about whether the funds realised by Alfred Herbert from closures can be retained by the firm, the answer is "Certainly." The purpose of the exercise is to try to make what remains a viable concern. If that proves successful, as we must hope, it may be possible for the NEB to find a private buyer and so recoup some of the £43 million of public money which has been sunk in the company so far.

Mr. Charles R. Morris: Will the Minister give way?

Mr. Mitchell: I shall be coming to the right hon. Gentleman's points a little later.
The hon. Member for Coventry, North-East stressed the importance in terms of industrial relations of genuine information being available on the shop floor. I agree with him. However, that is a matter for companies' managements, and it is certainly one that we would wish to encourage. Good communications should be part of good management.
The hon. Member for Caernarvon (Mr. Wigley) half moved amendment No. 2, which is concerned with functions of the Welsh Development Agency. He raised the question, in summing up his amendment, of the WDA having a function to build up industry and he wanted it to have the function of stopping the closing down of industry. He instanced the case of Bernard Wardle, a factory in his constituency, where I am sorry to learn that 322 people are to lose their jobs following a takeover bid and a closure announcement. If he feels that

it would be helpful to discuss the details with me, I assure him that my door is open for him to do so. But on the Amendment Paper he was to move an amendment promoting or assisting the reorganisation of an industry or any undertaking in an industry. That is the amendment tabled and selected for debate.

Mr. Wigley: Perhaps I may help the Minister. I think that he has got matters wrong. My amendment was No. 5, included with this group, and not No. 2. Amendment No. 2 has not been selected.

Mr. Mitchell: I have got the right argument even if I have the wrong number. Understandably, the hon. Member hardly mentioned his amendment when he was talking about the problems of the firm in his constituency. I invite the House to consider the case of the dog that did not bark, because what the hon. Member was doing was drawing our attention to the case of a company which is being rationalised while he was speaking to an amendment seeking to extend the powers to reorganise industries and undertakings within industries.
As the hon. Member well knows, one of the most frequent forms of reorganisation is rationalisation and closure of particular sections of a company. Therefore, I well understand his embarrassment at finding himself with the same item on the Amendment Paper which scores goals through his own goal posts.

Mr. Wigley: Clearly the Minister is talking to the wrong amendment. Amendment No. 5, which was the one taken and the one that I spoke to, gives power for the WDA to intervene in the case of a takeover by a company outside Wales, in this case, which leads to the closure of a company in Wales. I linked my argument with the one put forward by the right hon. Member for Deptford (Mr. Silkin) that decisions can be taken in this way that are contrary to public policy—for instance, when a company in a special development area or a development area is closed down on the directions of a head office outside that area in order to move jobs to a different area. To that extent, my amendment is totally coherent with what we are trying to achieve.

Mr. Mitchell: The hon. Gentleman may believe that his argument was coherent, but I take a different view. I believe that the intervention he is seeking could produce the sort of result that


he has illustrated he does not want to take place.
My hon. Friend the Member for Bury St. Edmunds (Mr. Griffiths), in an effective speech, destroyed much of the case of the right hon. Member for Deptford. He realistically described the problems of British management and measured the performance of public and private sector deliveries, custom, service, design and industrial relations. He found in each case that the public sector was less successful.
The right hon. Member for Openshaw sought wider NEB consultations with workers. That is a matter for individual companies. We seek to encourage it, but it is not a matter for imposition.
In a powerful speech, my right hon. Friend the Member for Yeovil (Mr. Peyton) went back to first principles and demonstrated the enlarged role of the NEB that is sought by the Opposition and how it has no relevance and help to offer to the United Kingdom economy.
I hope that I have succeeded in covering some of the points raised by hon. Members. However, I am conscious that the House would like to hear my right hon. Friend the Secretary of State speak, particularly in view of the principles raised by the right hon. Member for Deptford.

Mr. Ron Brown: Clearly, this Government believe in private enterprise. Perhaps it is better known as the capitalist system. It is an animal that bites and it has a bark, because we have heard it today.
The Government have the honest philosophy that they do not have the right to plunder public assets, because those assets belong to the people of this country. We talk about democracy and owning property. I believe that property is an investment for the future. We have a responsibility to look after it. We all know of the problems of British industry, but it is no secret that the problems are worldwide. However, for various reasons, the problems in this country are more severe.
We should realise that the old story about the fall guys will not work. It is all very well to talk about greedy workers, but workers in this country are poorly paid. I have heard us described as the coolies of Europe. The wages and conditions prevailing in this country are often Dickensian. There are other allegations

about our lazy workers. Workers in this country work as hard as their European counterparts. The problem is that they do not work efficiently enough, because of clapped-out machinery.
The real problem is lack of investment. Mr. Jack Jones spoke about an investment strike. Certainly, the right hon. Member for Sidcup (Mr. Heath) knew about that. He despaired because, despite the encouragement that he gave to big business, he did not get the response that he was looking for. The arrogance is typical of the old Empire days, when the saying was that when times were good there was no need to invest and that when times were bad people could not afford to invest. That attitude prevails today.
It is interesting to note the series of statistics produced by the National Westminster Bank referring to the year 1976. That is not too far off; most of us can remember it. The statistics show that assets per worker amounted to £7,500, compared with £23,000 in Germany and £30,000 in Japan. That is an indication of the seriousness of the problem. Since then, the problem has become worse.
The rate of unemployment in Scotland indicates that the matter is far worse there than in the rest of the country. The factory structure in Scotland is antiquated. Indeed, as was reported in The Scotsman, 40 per cent. of Scottish factories were built before the war—some were built before the First World War. All this means higher unit costs, and many companies in the United Kingdom work at far below capacity. The CBI has reported that 60 per cent. of factories work at below capacity. That gives us an idea of the size of the problem.
What is the Government's solution? Perhaps quack medicine is all right for lame ducks—I do not mean that as a pun. The Government speak about reducing the role of public enterprise and phasing out regional aid, which is vital in many parts of the country. In addition, there is the question of high interest payments, which are hitting small companies throughout the country—certainly those in my constituency. When small companies go to the wall, larger monopolies are created. Monopolies do not enhance the capitalist system, which the Tory Party believes in. They have the opposite effect.
The Government are not encouraging investment in this country, but they are encouraging it abroad. That was the reason why they took the controls off the export of capital. Money that has been created by the people in this country is being sent abroad to America, South Africa and Australia. It is no secret that many companies are being set up in, for example, the Cayman Islands and in Panama. We have only to read the press to see advertisements inviting companies to set up abroad and enjoy tax havens. I am sure that many companies are taking up those offers.
The Government are offering a new deal in reverse. They are taking back the support that industry previously enjoyed—at least, it had the possibility of enjoying it if the offer had been taken up. The matter is so desperate that rather than reduce the role of public enterprise we should try to improve upon it. Although the NEB, the WDA and the SDA were far from perfect, they were doing a good job and getting things moving. I believe that they should have more powers.
In certain parts of the country, companies such as Ferranti and Rolls-Royce were bailed out, maintained and brought back to health. That was good work. Many of my constituents who work for Ferranti are concerned that the shares in that company will be sold off. Those people are not militants, but the policies of the Government are turning them into militants. We see that happening in the steel industry and elsewhere. The Government must appreciate that working people will not accept reactionary policies indefinitely. They will have to pay the price for those policies.
The question now for the Labour Party is one of renationalisation when we regain office. That will take place quite soon, judging from the way things are going. We have to talk about taking back the assets and paying the minimum of compensation. I hear that demand repeatedly in the Labour movement throughout the country. That should be considered, because it is important.
If proof is needed, the crisis in Britain demonstrates that we need a programme of Socialist measures. Such measures must involve not only taking over private industries and companies but conquering the commanding heights. Insurance companies,

large finance houses and banks must be taken over. Let us take over the real controlling powers. We should take over the companies that make profits and make those profits work for the people of Britain. We must inject money into the economy instead of spending it elsewhere.
Whenever nationalised industries are badly run, the Labour Party is blamed. However, as far as I know, the Labour Party has never thought of appointing a Socialist as chairman of a nationalised company. If we had a Socialist chairman at British Leyland, we would not have the same problems. We must put our people into our industries. We must turn public enterprise into Socialist enterprise. That is the only answer at the end of the day.

8 pm

The Secretary of State for Industry (Sir Keith Joseph): The House knows that I had to be away from the Chamber for the early part of the debate. I have apologised to the Opposition Front Bench. I am grateful to the House for giving me the opportunity to reply to the big issues that the right hon. Member for Deptford (Mr. Silkin) and several of his hon. Friends have raised.
I should like to pick up some of the issues to which the hon. Member for Edinburgh, Leith (Mr. Brown) has just referred. I agreed with several of his comments. In particular, I deplore the relatively low standard of living. In some cases, many of our people live and work in Dickensian conditions. I hope that the hon. Gentleman will accept that my hon. Friends and I are animated by quite as much passion as any Opposition Member and that we wish to see conditions improved.
I hope that the hon. Gentleman will accept that we are a relatively low paid and low pensioned country because our output per head is relatively low. There is a close and intimate connection between the output per man or woman here, what the customer at home or abroad will buy and the standard of living. The right hon. Member for Deptford shakes his head. I shall be fascinated to read or hear his argument.
I must persuade the hon. Member for Leith that one of the statistics that he produced with great force, because he was convinced that he had proved his case.


can be looked at differently. He argued that the major problem in Britain is that of investment. He argued that one need only look at the amount of investment per worker compared with that in other countries. However, the same figure that appears to show that our workers have relatively little investment behind them can be interpreted quite differently. It can be shown that we have about twice as many workers per unit of investment. Other countries have far more investment per worker because they have fewer workers for each unit of investment. In other words, we suffer from over manning, even though that over manning may be well intentioned. That is a major reason why our standard of living is lower than that of more successful countries.
If the hon. Gentleman were to say that this was a management problem, I would accept that primarily it is the responsibility of management. However, great obstacles are placed in the way of managements through the combination of wrong-headed Governments and uncomprehending trade unions. I do not wish to underestimate the range and scale of the problems facing us. I hope that the House will agree that, despite problem areas, we have much that is excellent within our economy. There are first-class firms, both large and small, in relatively weak industrial sectors. There are weak firms, large and small, in some of the strong industrial sectors.
I bitterly regret that behind all our debates lies a gulf between the understanding and perceptions of the Government and the Opposition. We perceive that jobs, the standard of living and social benefits ultimately flow from the customer at home and abroad. The Opposition agree that the customer is important. However, they seem to base much of their policy and rhetoric on the assumption that producers are more important than consumers. Alas, that is the way to impoverish producers. Producers depend upon the satisfaction of consumers for their jobs. We are all consumers and most of us are producers. The problem is to reconcile the interest of every individual as a producer with the interest of every individual as a consumer.
We believe that that reconciliation can best be made through free enterprise within a framework of humane laws, in-

stitutions and safety nets. I long for increasingly common ground between the two sides. The hon. Member for Liverpool, Walton (Mr. Heifer) has now joined us. He is nobly restraining himself. Perhaps he will find something before I finish that he will not be able to tolerate in silence.
The British were industrial pioneers in many ways. We began the urban revolution, the agricultural revolution and the medical revolution in this millenium, as well as the Industrial Revolution. We have a proud record as pioneers. There is much academic dispute about the quality of management in different epochs of the nineteenth century. We all acknowledge the pioneering quality of the early entrepreneurs. There is much academic argument about what happened to their successors. There is also much academic argument about the quality of our education system. We argue not only about the relevance of that system to industry or commerce but about its quality. There is much argument about the relevance of the education system to our industrial performance.
Leaving the nineteenth century behind, there is little doubt that we have increasingly handicapped the scope of management. Above all, we have handicapped it by excess in monetary matters. There was too little money in the 1920s and 1930s, and too much in the 1960s and 1970s. That led to fierce deflation in the 1920s and 1930s, and fiercer and fiercer inflation in the 1960s and 1970s. We have handicapped our management by an anti-business attitude.
I hope that Opposition Members will be patient, as I am being as fast as I can. I hope that they will allow me to race through a few headings of those areas where we have handicapped management since the Second World War. Since then, we have had excessive Government spending. There have been discouraging levels of direct taxation. There has been too much egalitarianism. We have had too much nationalisation. There has been a continuation of anti-business attitudes. The trade union movement discourages the adaptability upon which service to the customer at home and abroad depends.
If hon. Gentlemen were not being patient, they would say that a number


of other countries have one or more of those burdens, and I have to agree. However, I say to them that no other country in the free world has three, four or five, let alone all six, of those burdens on the economy. We are the only country that has all of them. Cumulatively, they account for much of our dispiriting performance.

Mr. Heffer: I am sure that the right hon. Gentleman will not agree, but I believe that there is an additional burden—the Conservative Government.

Sir K. Joseph: The hon. Gentleman can do better than that.
On top of all that, we now have high interest rates and a strong exchange rate, which are consequences of policies that we believe are in the interests of the country. Considering the cumulative effect, the miracle is that our management and industry do as well as they do.
Against that background, I come to the clash of philosophies represented in the debate on the amendments. We believe that the main job is to change the framework within which business has to operate in order to rectify some of the obstacles and disincentives. I do not for one moment deny that there will always be need for direct Government action in some fields within our responsibility. I am not stating that the Government have no action to take except on the framework. On the other hand, the Labour Party tends to put its emphasis not on the framework, which we believe to be deeply discouraging, but on direct action of the Government. Again, I am not saying that the Labour Party ignores the framework or that it expects everything to be done by direct Government intervention, but there is a difference of emphasis between us.

Mr. John Silkin: Not long ago, the right hon. Gentleman said that there were three proper elements for Government intervention—infrastructure, communications and training. His Government have cut the amount of money spent on all three. Does he dissociate himself from earlier remarks? If not, why are his Government cutting the amounts?

Sir K. Joseph: I am not conscious of having limited Government responsibility to those three elements. There are many others that I should accept.
I believe that against that background the Labour Party has greatly exaggerated the scope and potential of the National Enterprise Board.

Mr. Silkin: Will the right hon. Gentleman answer my question? Has he changed his mind?

Sir K. Joseph: No, I have not changed my mind. The Government have responsibility for many things, including those to which the right hon. Gentleman refers. The amount of taxpayers' money spent by the Government at any one time has to be subject to all the pressures of competing claims for resources, including claims of taxpayers to have more of their own resources left in their pockets and handbags.

Mr. Silkin: Does the right hon. Gentleman mean the claims of those paying surtax?

Sir K. Joseph: I hear the right hon. Gentleman muttering about surtax payers. We happen to believe that it impoverishes everyone in the country if those who have talent and drive in economic ways are discouraged by excessive taxation. We believe that it is in the interests of all that disincentive taxation should be reduced. I am not in the least on the defensive about what we have done to adjust taxation levels.

Mr. Cryer: The repeated claim of the right hon. Gentleman and his right hon. and learned Friend the Chancellor of the Exchequer is that the previous Budget gave people the incentive and drive to create jobs. Where are those jobs? Unemployment has increased and factories are closing week after week.

Sir K. Joseph: The hon. Gentleman knows that had he been answering a question about the effect of policies when he was, for a short time, a Minister speaking from these Benches, he would have said that the country could not expect instant transformation. He knows that I shall say that there must be a time lag in the results.
While we have no numbers, we know that many people who fled the country under the Socialist tax system have returned and will contribute to the increased vitality of our economy, from which all will benefit.
I am grateful to the House for its patience, and I wish now, very briefly, to deal with the amendments.

I am told that the right hon. Member for Deptford, in my absence, spoke lovingly of my past and my comments on my past. I give him ample ammunition to use against me, and he unfailingly uses it. He went on to dwell with some relish—that is unfair; I withdraw the word "relish"—on our relatively poor manufacturing performance.

I have tried briefly to summarise the discouraging framework and attitudes. Against the NEB's wishes, the Labour Government left it in a truncated form, with only one single planning agreement in action and with far less money than many of its supporters wished to be made available. The concept that the NEB, even in its original form, could have started to rectify the problems of the country is disproportionate against the background that I have tried to summarise.

In an interview a few years ago, I allowed myself to compare the NEB and its scope, without any disrespect to the NEB, to a 10p piece against an average-sized table. If I may use the Dispatch Box for this unusual purpose, for the moment I will treat the Dispatch Box as being the magnitude of the whole economy. Here—and it is too large in proportion—is the scope of the NEB.

Surely it is more sensible to use our energy to alter the framework than to beef up or marginally beef down the NEB. I am not being disrespectful to the NEB. I accept that it might be able to do something useful, but let us get it in proportion.

The NEB, as we propose that it should be, will no longer have the right to reorganise industry. Those who imagine that, on balance, the NEB would have been beneficial to the country, had it been left with the power to reorganise British industry, should be a little humble in their interpretation of the past. It is true that there have been some reorganizations in industry that have proved beneficial. In one or two cases the NEB's predecessor, the IRC, had some connection with that reorganisation. However, there have been even more cases in which external reorganisations by

Government agencies have been disastrous. A little humility and a little history should help us understand the real value of any such ambition.

It is true that we are denying the NEB the emphasis on public ownership. We see a catalytic role for the NEB on a limited number of fronts. We ask the NEB to dispense assets back to the private sector. That is not asset stripping. In return for the sale of those assets, the taxpayer will receive the price for them. We see the NEB as having, with its new membership, a valuable catalytic role in connection with high technology, small business, small firms and the regions. We accept a limited role for the NEB.

The debate included a number of interesting speeches which I heard and a number of, no doubt, interesting speeches which, I fear, I did not hear. I heard the speech of the hon. Member for Vauxhall (Mr. Holland), who spoke with fervour. We have no vendetta against public ownership or nationalisation. We accept that there are some utilities, especially utility monopolies, that cannot sensibly or easily be put into private ownership.

There would have to be a regulatory framework if, for instance, water, electricity or gas were put into private ownership. We distinguish sharply between utility nationalised industries and trading nationalised industries. It would be nothing short of madness in the intensely competitive markets of the world to nationalise trading activities where quick decisions and readiness to adapt to the market are absolutely indispensable if jobs are to flourish and the standard of living is to be increased.

We make no apology for putting in hand the partial denationalisation of British Aerospace, the National Freight Corporation and British Airways.

Mr. Cryer: The right hon. Gentleman says that he has no vendetta against public ownership. Is it not true that the right hon. Gentleman, on Second Reading of the British Aerospace Bill, said that British Aerospace workers and management were not the subject of criticism? Yet his Government, of which he is the Secretary of State for Industry, are busily selling off to private enterprise and unsettling and destroying the confidence of a vital industry that is doing a good job for the nation.

Sir K. Joseph: There has not been time for nationalisation to do its fell work on this important trading industry. It has been nationalised for about two years only. We very much fear that the jobs of those who work in it and the benefits for the country would have been sapped, not by the ill will or the inferior qualities of the managers or directors involved—it is not a question of personal qualities—but by its relatively poor market performance in a market industry, which flows from the immunity from bankruptcy. Because of that immunity, directors, management and workers feel that they do not need to adapt as readily as they know they must adapt in the private sector, where bankruptcy is round the corner.
I have tried to cover a large amount of ground simply to expose the clash between the two sides of the House on the amendments that have been considered. I hope that after the explanation of my hon. Friend the Under-Secretary, most of whose elegant and clear speech I heard, the House will have been convinced and that the amendment will be withdrawn. If it is not withdrawn, I hope that my right hon. and hon. Friends will vote against it.

Dr. John Cunningham: I, like the Secretary of State, will be brief. I refer to some of the words that the right hon. Gentleman used about the range and scale of the industrial problems that we face. He said that against the framework of the economy, and in this context, the NEB was a relatively small organisation. That is true, and we can agree about that. What we cannot agree about is that against our industrial and economic background the Government should further disable themselves by making the NEB even less effective in the national interest in helping to reorganise or regenerate industry.
Nor can we agree with the Secretary of State's brushing aside the points made by my right hon. Friend the Member for Deptford (Mr. Silkin) and others about the climate for enterprise. Far from improving the climate, the actions of the Government, as my hon. Friend the Member for Keighley (Mr. Cryer) and others said, have made the position much worse. This is especially so for small industrial firms. The right hon. Gentleman cannot escape the responsibility there.
The Budget, the high sterling policy of the Government, the high interest rates and the high rate of VAT have all been damaging in that regard. They have all been conscious decisions of the Administration of which the right hon. Gentleman is a member.
The right hon. Gentleman spoke briefly about the powers and functions of the NEB to reorganise industry and develop public enterprise into more profitable areas, but about further industrial development he said not a word. It is strange that in these circumstances, and against that background, the Government should, in a number of ways, be pushing the trade unions away from involvement in the difficulties that we face and that they should be taking a conscious decision not to draw people into greater involvement, understanding and participation in their own livelihoods and industries. We condemn them for taking that action, too.
It seems particularly strange that the right hon. Gentleman should be happy for merchant bankers, people in the City—the Slater Walkers of this world—to have the ability to reorganise many of our vital industries but that the State, the Government and the trade unions should have no effective, even though small, opportunity to participate in such reorganisation. That was the advantage of the NEB having this power and function. I should emphasise to Conservative Members that none of these functions carried any compulsory powers. No one can claim to have been under any threat from the NEB because of legal powers under any of these headings. These changes are being made on the basis of dogma and for no other good reason.
As the problems deepen, as the industrial background of the country worsens, as our ability to sustain our industries is eroded by foreign competition—some of it fair, some of it less than fair—as many of our competitor and partner countries, as was pointed out by my hon. Friend the Member for Vauxhall (Mr. Holland), are taking measures to strengthen public involvement and support, this Administration, almost alone, are weakening and withdrawing that support. Nowhere is the loss of flexibility to deal with these problems more apparent than in their destruction of these functions of the NEB.
Although time prevents me from referring to many speeches, I feel for the


nightmare through which the hon. Member for Christchurch and Lymington (Mr. Adley) seems to have been going tonight. We know him as an assiduous, hardworking Member who takes a great deal of care to look after the interests of his constituents. He has been trying to do that today, and we congratulate him on it. Indeed, we urge him to continue in that vein by pressing his amendment to a Division. We assure him of our wholehearted support for the intention behind his amendment. If I were him, I should accept none of the blandishments of his hon. Friend the Under-Secretary of State and would press the amendment to a Division, in the interests of his constituents. We certainly welcome the opportunity to support the hon. Gentleman.
The speech of the hon. Member for Bury St. Edmunds (Mr. Griffiths) is worthy of comment, if only to draw attention to the labyrinth of inconsistencies within it. The hon. Gentleman said that he regretted the abolition of the Industrial Reorganisation Corporation and then proceeded to say that he would vote for the abolition of this function of the NEB. That seemed a remarkable inconsistency.
The hon. Gentleman said that more than anything else industry needed a period of stability and policy in approach, but he went on to say that he would vote for further changes in industrial policy under both the NEB and the terms and provisions of regional policy.
The hon. Gentleman made a slashing and mainly unsubstantiated attack on the public sector. Which sector of our economy has been more interfered with and more directed by the Government, particularly by his right hon. and hon. Friends, than our public sector enter-

prises? When the previous Labour Government came to office, almost all those enterprises were in deficit because of the policies of the previous Conservative Administration.

Mr. Eldon Griffiths: Should not we therefore have a smaller public sector, so that Governments do not interfere?

Dr. Cunningham: I see no logic in that, What has the size of the public sector to do with it? The size of the public sector is not relevant to this argument. At least, if it is, I fail to see how the hon. Gentleman has made the point.
My right hon. Friend the Member for Rutherglen (Mr. MacKenzie), who has experience as a Minister in the Department of Industry, and many of my colleagues have pointed out, from their experience, how industrialists in the private sector have welcomed assistance through, first, the IRC and then the National Enterprise Board, and through regional policy. Even the CBI, at its conference and elsewhere, has drawn attention to the need for greater communication with and involvement of the work force. It has said that although it wants public expenditure cuts, these should not involve expenditure that is meant to help it to develop and sustain its industrial activities.
We shall press our amendment to a vote. Although we admit—we have never said anything to the contrary—that the National Enterprise Board, exercising these powers and functions, could not, on its own, resolve all our industrial problems, the powers and functions are an important weapon for any Government. We believe that they should be sustained.

Question put, That the amendment be made:—

The House divided: Ayes 239, Noes 301.

Division No. 155]
AYES
[8.31 pm


Abse Leo
Bray, Dr Jeremy
Cohen, Stanley


Allaun, Frank
Brown, Hugh D. (Provan)
Coleman, Donald


Anderson, Donald
Brown, Robert C. (Newcastle W)
Concannon, Rt Hon J. D.


Archer, Rt Hon Peter
Brown, Ronald W. (Hackney S)
Cook, Robin F.


Armstrong, Rt Hon Ernest
Brown, Ron (Edinburgh, Leith)
Cowans, Harry


Ashley, Rt Hon Jack
Buchan, Norman
Cox, Tom (Wandsworth, Tooting)


Ashton, Joe
Callaghan, Rt Hon J. (Cardiff SE)
Craigen, J. M. (Glasgow, Maryhill)


Barnett, Guy (Greenwich)
Callaghan, Jim (Middlelon &amp; P)
Crowther, J. S.


Barnett, Rt Hon Joel (Heywood)
Campbell, Ian
Cryer, Bob


Benn, Rt Hon Anthony Wedgwood
Campbell-Savours, Dale
Cunliffe, Lawrence


Bennett, Andrew (Stockport N)
Canavan, Dennis
Cunningham, George (Islington S)


Bidwell, Sydney
Cant, R. B.
Cunningham, Dr John (Whitehaven)


Booth, Rt Hon Albert
Carmichael, Neil
Dalyell, Tam


Boothroyd, Miss Betty
Carter-Jones, Lewis
Davidson, Arthur


Bottomley, Rt Hon Arthur (M'brough)
Clark, Dr David (South Shields)
Davies, Rt Hon Denzil (Llanelli)


Bradley, Tom
Cocks, Rt Hon Michael (Bristol S)
Davies, Ifor (Gower)




Davis, Clinton (Hackney Central)
Jones, Rt Hon Alec (Rhondda)
Race, Reg


Deakins, Eric
Jones, Barry (East Flint)
Rees, Rt Hon Merlyn (Leeds South)


Dean, Joseph (Leeds West)
Jones, Dan (Burnley)
Richardson, Jo


Dewar, Donald
Kaufman, Rt Hon Gerald
Roberts, Allan (Bootle)


Dixon, Donald
Kerr, Russell
Roberts, Ernest (Hackney North)


Dobson, Frank
Kilfedder, James A.
Roberts, Gwilym (Cannock)


Dormand, Jack
Kilroy-Silk, Robert
Robertson, George


Douglas, Dick
Lambie, David
Rodgers, Rt Hon William


Douglas-Mann, Bruce
Lamborn, Harry
Rooker, J. W.


Dubs, Alfred
Lamond, James
Ross, Ernest (Dundee West)


Duffy, A. E. P.
Leadbitter, Ted
Ross, Stephen (Isle of Wight)


Dunn, James A. (Liverpool, Kirkdale)
Leighton, Ronald
Rowlands, Ted


Dunwoody, Mrs. Gwyneth
Lestor, Miss Joan (Eton &amp; Slough)
Ryman, John


Eadie, Alex
Lewis, Ron (Carlisle)
Sandelson, Neville


Eastham, Ken
Litherland, Robert
Sever, John


Edwards, Robert (Wolv SE)
Lofthouse, Geoffrey
Sheerman, Barry


Ellis, Raymond (NE Derbyshire)
Lyon, Alexander (York)
Sheldon, Rt Hon Robert (A'ton-u-L)


Ellis, Tom (Wrexham)
Lyons, Edward (Bradford West)
Shore, Rt Hon Peter (Step and Pop)


English, Michael
McCartney, Hugh
Short, Mrs. Renée


Ennals, Rt Hon David
McDonald, Dr Oonagh
Silkin, Rt Hon John (Deptford)


Evans, Ioan (Aberdare)
McElhone, Frank
Silkin, Rt Hon S. C. (Dulwich)


Evans, John (Newton)
McGuire, Michael (Ince)
Silverman, Julius


Ewing, Harry
McKelvey, William
Smith, Cyril (Rochdale)


Field, Frank
MacKenzie, Rt Hon Gregor
Soley, Clive


Fitt, Gerard
Maclennan, Robert
Spearing, Nigel


Flannery, Martin
McMahon, Andrew
Spriggs, Leslie


Fletcher, Ted (Darlington)
McMillan, Tom (Glasgow, Central)
Stallard, A. W.


Foot, Rt Hon Michael
McNally, Thomas
Steel, Rt Hon David


Ford, Ben
McNamara, Kevin
Stewart, Rt Hon Donald (W Isles)


Forrester, John
McWilliam, John
Stoddart, David


Foster, Derek
Magee, Bryan
Stott, Roger


Foulkes, George
Marks, Kenneth
Strang, Gavin


Freeson, Rt Hon Reginald
Marshall, David (Gl'sgow.Shettles'n)
Straw, Jack


Garrett, John (Norwich S)
Marshall, Dr Edmund (Goole)
Taylor, Mrs Ann (Bolton West)


Garrett, W. E. (Wallsend)
Marshall, Jim (Leicester South)
Thomas, Jeffrey (Abertillery)


Ginsburg, David
Martin, Michael (Gl'gow, Springb'rn)
Thomas, Mike (Newcastle East)


Golding, John
Mason, Rt Hon Roy
Thomas, Dr Roger (Carmarthen)


Gourlay, Harry
Maxton, John
Thorne, Stan (Preston South)


Graham, Ted
Maynard, Miss Joan
Tilley, John


Grant, George (Morpeth)
Meacher, Michael
Torney, Tom


Grant, John (Islington C)
Mellish, Rt Hon Robert
Varley, Rt Hon Eric G.


Hamilton, James (Bothwell)
Mikardo, Ian
Wainwright, Edwin (Dearne Valley)


Hamilton, W. W. (Central Fife)
Millan, Rt Hon Bruce
Wainwright, Richard (Colne Valley)


Hardy, Peter
Mitchell, Austin (Grimsby)
Walker, Rt Hon Harold (Doncaster)


Harrison, Rt Hon Walter
Morris, Rt Hon Alfred (Wythenshawe)
Watkins, David


Hart, Rt Hon Dame Judith
Morris, Rt Hon Charles (Openshaw)
Weetch, Ken


Hattersley, Rt Hon Roy
Morris, Rt Hon John (Aberavon)
Wellbeloved, James


Haynes, Frank
Morton, George
White, Frank R. (Bury &amp; Radcliffe)


Healey, Rt Hon Denis
Moyle, Rt Hon Roland
White, James (Glasgow, Pollock)


Heffer, Eric S.
Mulley, Rt Hon Frederick
Whitlock, William


Hogg, Norman (E Dunbartonshire)
Newens, Stanley
Wigley, Dafydd


Holland, Stuart (L'beth, Vauxhall)
Oakes, Rt Hon Gordon
Willey, Rt Hon Frederick


Home Robertson, John
O'Halloran, Michael
Williams, Rt Hon Alan (Swansea W)


Homewood, William
O'Neill, Martin
Williams, Sir Thomas (Warrington)


Horam, John
Orme, Rt Hon Stanley
Wilson, Gordon (Dundee East)


Howells, Geraint
Owen, Rt Hon Dr David
Wilson, Rt Hon Sir Harold (Huyton)


Huckfield, Les
Palmer, Arthur
Wilson, William (Coventry SE)


Hudson Davies, Gwilym Ednyfed
Park, George
Winnick, David


Hughes, Mark (Durham)
Parker, John
Woodall, Alec


Hughes, Robert (Aberdeen North)
Parry, Robert
Woolmer, Kenneth


Hughes, Roy (Newport)
Pavitt, Laurie
Wrigglesworth, Ian


Janner, Hon Greville
Penhaligon, David



Jay, Rt Hon Douglas
Powell, Raymond (Ogmore)
TELLERS FOR THE AYES


John, Brynmor
Prescott, John
Mr. Terry Davis and


Johnston, Russell (Inverness)
Price, Christopher (Lewisham West)
 Mr. James Tinn.




NOES


Adley, Robert
Bevan, David Gilroy
Brotherton, Michael


Aitken, Jonathan
Biffen, Rt Hon John
Brown, Michael (Brigg &amp; Sc'thorpe)


Alexander, Richard
Biggs-Davison, John
Browne, John (Winchester)


Alison, Michael
Blackburn, John
Bruce-Gardyne, John


Amery, Rt Hon Julian
Blaker, Peter
Bryan, Sir Paul


Ancram, Michael
Body, Richard
Buchanan-Smith, Hon Alick


Arnold, Tom
Bonsor, Sir Nicholas
Budgen, Nick


Aspinwall, Jack
Boscawen, Hon Robert
Bulmer, Esmond


Atkins, Rt Hon H. (Spelthorne)
Bottomley, Peter (Woolwich West)
Burden, F. A.


Atkins, Robert (Preston North)
Bowden, Andrew
Butcher, John


Atkinson, David (B'mouth, East)
Boyson, Dr Rhodes
Butler, Hon Adam


Baker, Kenneth (St. Marylebone)
Bradford, Rev. R.
Cadbury, Jocelyn


Baker, Nicholas (North Dorset)
Braine, Sir Bernard
Carlisle, John (Luton West)


Bell, Sir Ronald
Bright, Graham
Carlisle, Kenneth (Lincoln)


Bendall, Vivian
Brinton, Tim
Carlisle, Rt Hon Mark (Runcorn)


Benyon, Thomas (Abingdon)
Brittan, Leon
Chalker, Mrs. Lynda


Benyon, W. (Buckingham)
Brocklebank-Fowler, Christopher
Channon, Paul


Best, Keith
Brooke, Hon Peter
Clark, Hon Alan (Plymouth, Sutton)







Clark, Sir William (Croydon South)
Jenkin, Rt Hon Patrick
Pym, Rt Hon Francis


Clarke, Kenneth (Rushcliffe)
Jessel, Toby
Raison, Timothy


Cockeram, Eric
Johnson Smith, Geoffrey
Rathbone, Tim


Colvin, Michael
Jopling, Rt Hon Michael
Rees, Peter (Dover and Deal)


Cope, John
Joseph, Rt Hon Sir Keith
Rees-Davies, W. R.


Cormack, Patrick
Kaberry, Sir Donald
Renton, Tim


Corrie, John
Kellett-Bowman, Mrs Elaine
Rhodes James, Robert


Costain, A. P.
Kershaw, Anthony
Rhys Williams, Sir Brandon


Cranborne, Viscount
Kimball, Marcus
Ridley, Hon Nicholas


Critchley, Julian
King, Rt Hon Tom
Rifkind, Malcolm


Crouch, David
Knight, Mrs Jill
Roberts, Wyn (Conway)


Dean, Paul (North Somerset)
Knox, David
Ross, Wm. (Londonderry)


Dickens, Geoffrey
Lang, Ian
Rossi, Hugh


Dorrell, Stephen
Latham, Michael
Rost, Peter


Douglas-Hamilton, Lord James
Lawrence, Ivan
Royle, Sir Anthony


Dover, Denshore
Lawson, Nigel
Sainsbury, Hon Timothy


du Cann, Rt Hon Edward
Lee, John
St. John-Stevas, Rt Hon Norman


Dunn, Robert (Dartford)
Lennox-Boyd, Hon Mark
Scott, Nicholas


Durant, Tony
Lewis, Kenneth (Rutland)
Shaw, Giles (Pudsey)


Eden, Rt Hon Sir John
Lloyd, Ian (Havant &amp; Waterloo)
Shaw, Michael (Scarborough)


Edwards, Rt Hon N. (Pembroke)
Lloyd, Peter (Fareham)
Shelton, William (Streatham)


Eggar, Timothy
Loveridge, John
Shepherd, Colin (Hereford)


Elliott, Sir William
Luce, Richard
Shepherd, Richard(Aldridge-Br'hills)


Emery, Peter
Lyell, Nicholas
Shersby, Michael


Eyre, Reginald
McCusker, H.
Silvester, Fred


Fairbairn, Nicholas
Macfarlane, Neil
Sims, Roger


Fairgrieve, Russell
MacGregor, John
Skeet, T. H. H.


Faith, Mrs Sheila
MacKay, John (Argyll)
Smith, Dudley (War. and Leam'ton)


Farr, John
McNair-Wilson, Michael (Newbury)
Speller, Tony


Fell, Anthony
McNair-Wilson, Patrick (New Forest)
Spence, John


Fenner, Mrs Peggy
McQuarrie, Albert
Spicer, Jim (West Dorset)


Finsberg, Geoffrey
Madel, David
Spicer, Michael (S Worcestershire)


Fisher, Sir Nigel
Major, John
Sproat, Iain


Fletcher, Alexander (Edinburgh N)
Marland, Paul
Squire, Robin


Fletcher-Cooke, Charles
Marlow, Antony
Stainton, Keith


Fookes, Miss Janet
Marshall, Michael (Arundel)
Stanbrook, Ivor


Forman, Nigel
Marten, Neil (Banbury)
Stanley, John


Fowler, Rt Hon Norman
Mather, Carol
Steen, Anthony


Fox, Marcus
Mawby, Ray
Stevens, Martin


Fraser, Rt Hon H. (Stafford &amp; St)
Mawhinney, Dr Brian
Stewart, John (East Renfrewshire)


Fraser, Peter (South Angus)
Maxwell-Hyslop, Robin
Stokes, John


Fry, Peter
Mayhew, Patrick
Stradling Thomas, J.


Galbraith, Hon T. G. D.
Mellor, David
Tapsell, Peter


Gardiner George (Reigate)
Meyer, Sir Anthony
Taylor, Robert (Croydon NW)


Gardner, Edward (South Fylde)
Miller, Hal (Bromsgrove &amp; Redditch)
Tebbit, Norman


Garel-Jones, Tristan
Mills, Iain (Meriden)
Temple-Morris, Peter


Gilmour, Rt Hon Sir Ian
Mills, Peter (West Devon)
Thompson, Donald


Glyn, Dr Alan
Miscampbell, Norman
Thorne, Neil (Ilford South)


Goodhart, Philip
Mitchell, David (Basingstoke)
Thornton, Malcolm


Gorst, John
Moate, Roger
Townend, John (Bridlington)


Gow, Ian
Molyneaux, James
Townsend, Cyril D. (Bexleyheath)


Gower, Sir Raymond
Montgomery, Fergus
Trippier, David


Grieve, Percy
Moore, John
Trotter, Neville


Griffiths, Eldon (Bury St Edmunds)
Morgan, Geraint
van Straubenzee, W. R.


Griffiths, Peter (Portsmouth N)
Morris, Michael (Northampton, Sth)
Viggers, Peter


Grist, Ian
Morrison, Hon Peter (City of Chester)
Waddington, David


Grylls, Michael
Mudd, David
Wakeham, John


Gummer, John Selwyn
Murphy, Christopher
Waldegrave, Hon William


Hamilton, Hon Archie (Eps'm&amp;Ew'll)
Myles, David
Walker, Rt Hon Peter (Worcester)


Hamilton, Michael (Salisbury)
Neale, Gerrard
Walker, Bill (Perth &amp; E Perthshire)


Hampson, Dr Keith
Needham, Richard
Walker-Smith, Rt Hon Sir Derek


Hannam, John
Nelson, Anthony
Wall, Patrick


Haselhurst, Alan
Neubert, Michael
Waller, Gary


Hastings, Stephen
Newton, Tony
Walters, Dennis


Havers, Rt Hon Sir Michael
Normanton, Tom
Ward, John


Hawksley, Warren
Nott, Rt Hon John
Warren, Kenneth


Hayhoe, Barney
Osborn, John
Watson, John


Heddle, John
Page, John (Harrow, West)
Wells, John (Maidstone)


Henderson, Barry
Page, Rt Hon Sir R. Graham
Wells, Bowen (Hert'rd &amp; Stev'nage)


Heseltine, Rt Hon Michael
Page, Richard (SW Hertfordshire)
Wheeler, John


Hicks, Robert
Parris, Matthew
Whitelaw, Rt Hon William


Higgins, Rt Hon Terence L.
Patten, Christopher (Bath)
Whitney, Raymond


Hill, James
Patten, John (Oxford)
Wickenden, Keith


Hogg, Hon Douglas (Grantham)
Pawsey, James
Wiggin, Jerry


Holland, Philip (Carlton)
Percival, Sir Ian
Williams, Delwyn (Montgomery)


Hooson, Tom
Peyton, Rt Hon John
Winterton, Nicholas


Hordern, Peter
Pink, R. Bonner
Wolfson, Mark


Howe, Rt Hon Sir Geoffrey
Pollock, Alexander
Young, Sir George (Acton)


Howell, Rt Hon David (Guildford)
Porter, George
Younger, Rt Hon George


Howell, Ralph (North Norfolk)
Powell, Rt Hon J. Enoch (S Down)



Hunt, David (Wirral)
Prentice, Rt Hon Reg
TELLERS FOR THE NOES:


Hunt, John (Ravensbourne)
Price, David (Eastleigh)
Mr. Spencer Le Marchant and


Hurd, Hon Douglas
Prior, Rt Hon James
 Mr. Anthony Berry.


Irving, Charles (Cheltenham)
Proctor, K. Harvey

Question accordingly negatived.

Amendment proposed: No. 4, in page 1, line 14, at end insert—
'(g) ensuring that, where an individual manufacturing plant is scheduled for closure or for change of use from manufacturing purposes, such plant should be offered for sale, to any buyer who is able to satisfy the Board

of his intention and ability to continue the existing purposes.'—[Mr. John Silkin.]

Question put, That the amendment be made:—

The House divided: Ayes 241, Noes 295.

Division No. 156]
AYES
[8.44 p.m.


Abse, Leo
Flannery, Martin
Marshall, Jim (Leicester South)


Allaun, Frank
Fletcher, Ted (Darlington)
Martin, Michael (Gl'gow, Springb'rn)


Anderson, Donald
Foot, Rt Hon Michael
Mason, Rt Hon Roy


Archer, Rt Hon Peter
Ford, Ben
Maxton, John


Armstrong, Rt Hon Ernest
Forrester, John
Maynard, Miss Joan


Ashley, Rt Hon Jack
Foster, Derek
Meacher, Michael


Ashton, Joe
Foulkes, George
Mellish, Rt Hon Robert


Barnett, Guy (Greenwich)
Freeson, Rt Hon Reginald
Mikardo, Ian


Barnett, Rt Hon Joel (Heywood)
Garrett, John (Norwich S)
Millan, Rt Hon Bruce


Benn, Rt Hon Anthony Wedgwood
Garrett, W. E. (Wallsend)
Mitchell, Austin (Grimsby)


Bennett, Andrew (Stockport N)
Ginsburg, David
Morris, Rt Hon Alfred (Wythenshawe)


Bidwell, Sydney
Golding, John
Morris, Rt Hon Charles (Openshaw)


Booth, Rt Hon Albert
Gourlay, Harry
Morris, Rt Hon John (Aberavon)


Boothroyd, Miss Betty
Graham, Ted
Morton, George


Bradley, Tom
Grant, George (Morpeth)
Moyle, Rt Hon Roland


Bray, Dr Jeremy
Grant, John (Islington C)
Mulley, Rt Hon Frederick


Brown, Hugh D. (Provan)
Hamilton, James (Bothwell)
Newens, Stanley


Brown, Robert C. (Newcastle W)
Hamilton, W. W. (Central Fife)
Oakes, Rt Hon Gordon


Brown, Ronald W. (Hackney S)
Hardy, Peter
O'Halloran, Michael


Brown, Ron (Edinburgh, Leith)
Harrison, Rt Hon Waller
O'Neill, Martin


Buchan, Norman
Hart, Rt Hon Dame Judith
Orme, Rt Hon Stanley


Callaghan, Rt Hon J. (Cardiff SE)
Hattersley, Rt Hon Roy
Owen, Rt Hon Dr David


Callaghan, Jim (Middleton &amp; P)
Haynes, Frank
Palmer, Arthur


Campbell, Ian
Healey, Rt Hon Denis
Park, George


Campbell-Savours, Dale
Heffer, Eric S.
Parker, John


Canavan, Dennis
Hogg, Norman (E Dunbartonshire)
Parry, Robert


Cant, R. B.
Holland, Stuart (L'beth, Vauxhall)
Pavitt, Laurie


Carmichael, Neil
Home Robertson, John
Penhaligon, David


Carter-Jones, Lewis
Homewood, William
Powell, Raymond (Ogmore)


Clark, Dr David (South Shields)
Horam, John
Prescott, John


Cocks, Rt Hon Michael (Bristol S)
Howells, Geraint
Price, Christopher (Lewisham West)


Cohen, Stanley
Huckfield, Les
Race, Reg


Coleman, Donald
Hudson Davies, Gwilym Ednyfed
Rees, Rt Hon Merlyn (Leeds South)


Concannon, Rt Hon J. D.
Hughes, Mark (Durham)
Richardson, Jo


Cook, Robin F.
Hughes, Robert (Aberdeen North)
Roberts, Allan (Bootle)


Cowans, Harry
Hughes, Roy (Newport)
Roberts, Ernest (Hackney North)


Cox, Tom (Wandsworth, Tooting)
Janner, Hon Greville
Roberts, Gwilym (Cannock)


Craigen, J. M. (Glasgow, Maryhill)
Jay, Rt Hon Douglas
Robertson, George


Crowther, J. S.
John, Brynmor
Rodgers, Rt Hon William


Cryer, Bob
Johnston, Russell (Inverness)
Rooker, J. W.


Cunliffe, Lawrence
Jones, Rt Hon Alec (Rhondda)
Ross, Ernest (Dundee West)


Cunningham, George (Islington S)
Jones, Barry (East Flint)
Ross, Stephen (Isle of Wight)


Cunningham, Dr John (Whitehaven)
Jones, Dan (Burnley)
Rose, Wm. (Londonderry)


Dalyell, Tam
Kaufman, Rt Hon Gerald
Rowlands, Ted


Davidson, Arthur
Kerr, Russell
Ryman, John


Davies, Rt Hon Denzil (Llanelli)
Kilfedder, James A.
Sandelson, Neville


Davies, Ifor (Gower)
Kilroy-Silk, Robert
Sever, John


Davis, Clinton (Hackney Central)
Lambie, David
Sheerman, Barry


Davis, Terry (B'rm'ham, Stechford)
Lamborn, Harry
Sheldon, Rt Hon Robert (A'ton-u-L)


Deakins, Eric
Lamond, James
Shore, Rt Hon Peter (Step and Pop)


Dempsey, James
Leadbitter, Ted
Short, Mrs. Renée


Dewar, Donald
Leighton, Ronald
Silkin, Rt Hon John (Deptford)


Dixon, Donald
Lestor, Miss Joan (Eton &amp; Slough)
Silkin, Rt Hon S. C. (Dulwich)


Dobson, Frank
Lewis, Ron (Carlisle)
Silverman, Julius


Dormand, Jack
Litherland, Robert
Smith, Cyril (Rochdale)


Douglas, Dick
Lofthouse, Geoffrey
Soley, Clive


Douglas-Mann, Bruce
Lyon, Alexander (York)
Spearing, Nigel


Dubs, Alfred
Lyons, Edward (Bradford West)
Spriggs, Leslie


Duffy, A. E. P.
McDonald, Dr Oonagh
Stallard, A. W.


Dunn, James A. (Liverpool, Kirkdale)
McElhone, Frank
Steel, Rt Hon David


Dunwoody, Mrs. Gwyneth
McGuire, Michael (Ince)
Stewart, Rt Hon Donald (W Isles)


Eadie, Alex
McKelvey, William
Stoddart, David


Eastham, Ken
MacKenzie, Rt Hon Gregor
Stott, Roger


Edwards, Robert (Wolv SE)
Maclennan, Robert
Strang, Gavin


Ellis, Raymond (NE Derbyshire)
McMahon, Andrew
Straw, Jack


Ellis, Tom (Wrexham)
McMillan, Tom (Glasgow, Central)
Taylor, Mrs Ann (Bolton West)


English, Michael
McNally, Thomas
Thomas, Jeffrey (Abertillery)


Ennals, Rt Hon David
McNamara, Kevin
Thomas, Mike (Newcastle East)


Evans, Ioan (Aberdare)
McWilliam, John
Thomas, Dr Roger (Carmarthen)


Evans, John (Newton)
Magee, Bryan
Thorne, Stan (Preston South)


Ewing, Harry
Marks, Kenneth
Tilley, John


Field, Frank
Marshall, David (Gl'sgow,Shettles'n)
Tinn, James


Fitt, Gerard
Marshall, Dr Edmund (Goole)
Torney, Tom




Varley, Rt Hon Eric G.
White, James (Glasgow, Pollock)
Winnick, David


Wainwright, Edwin (Dearne Valley)
Whitlock, William
Woodall, Alec


Wainwright, Richard (Colne Valley)
Wigley, Dafydd
Woolmer, Kenneth


Walker, Rt Hon Harold (Doncaster)
Willey, Rt Hon Frederick
Wrigglesworth, Ian


Watkins, David
Williams, Rt Hon Alan (Swansea W)



Weetch, Ken
Williams, Sir Thomas (Warrington)
TELLERS FOR THE AYES


Wellbeloved, James
Wilson, Gordon (Dundee East)
Mr. Hugh McCartney and Mr. Joseph Dean.


Welsh, Michael
Wilson, Rt Hon Sir Harold (Huyton)



White, Frank R. (Bury &amp; Radcliffe)
Wilson William (Coventry SE)





NOES


Aitken, Jonathan
Elliott, Sir William
Lang, Ian


Alexander, Richard
Emery, Peter
Latham, Michael


Alison, Michael
Eyre, Reginald
Lawrence, Ivan


Amery, Rt Hon Julian
Fairbairn, Nicholas
Lawson, Nigel


Ancram, Michael
Fairgrieve, Russell
Lee, John


Arnold, Tom
Faith, Mrs Sheila
Lennox-Boyd, Hon Mark


Aspinwall, Jack
Farr, John
Lewis, Kenneth (Rutland)


Atkins, Rt Hon H. (Spelthorne)
Fell, Anthony
Lloyd, Ian (Havant &amp; Waterloo)


Atkins, Robert (Preston North)
Fenner, Mrs Peggy
Lloyd, Peter (Fareham)


Atkinson, David (B'mouth, East)
Finsberg, Geoffrey
Loveridge, John


Baker, Kenneth (St. Marylebone)
Fisher, Sir Nigel
Luce, Richard


Baker, Nicholas (North Dorset)
Fletcher, Alexander (Edinburgh N)
Lyell, Nicholas


Bell, Sir Ronald
Fletcher-Cooke, Charles
McCusker, H.


Bendall, Vivian
Fookes, Miss Janet
Macfarlane, Neil


Benyon, W. (Buckingham)
Forman, Nigel
MacGregor, John


Best, Keith
Fowler, Rt Hon Norman
MacKay, John (Argyll)


Bevan, David Gilroy
Fox, Marcus
McNair-Wilson, Michael (Newbury)


Biffen, Rt Hon John
Fraser, Rt Hon H. (Stafford &amp; St)
McNair-Wilson, Patrick (New Forest)


Biggs-Davison, John
Fraser, Peter (South Angus)
McQuarrie, Albert


Blackburn, John
Fry, Peter
Madel, David


Blaker, Peter
Galbraith, Hon T. G. D.
Major, John


Body, Richard
Gardiner, George (Reigate)
Marland, Paul


Bonsor, Sir Nicholas
Gardner, Edward (South Fylde)
Marlow, Tony


Boscawen, Hon Robert
Garel-Jones, Tristan
Marshall, Michael (Arundel)


Bowden, Andrew
Gilmour, Rt Hon Sir Ian
Marten, Neil (Banbury)


Boyson, Dr Rhodes
Glyn, Dr Alan
Mather, Carol


Bradford, Rev. R.
Goodhart, Philip
Mawby, Ray


Braine, Sir Bernard
Gorst, John
Mawhinney, Dr Brian


Bright, Graham
Gow, Ian
Maxwell-Hyslop, Robin


Brinton, Tim
Gower, Sir Raymond
Mayhew, Patrick


Brittan, Leon
Grieve, Percy
Mellor, David


Brocklebank-Fowler, Christopher
Griffiths, Peter (Portsmouth N)
Meyer, Sir Anthony


Brooke, Hon Peter
Grist, Ian
Miller, Hal (Bromsgrove &amp; Redditch)


Brotherton, Michael
Grylls, Michael
Mills, Iain (Meriden)


Brown, Michael (Brigg &amp; Sc'thorpe)
Gummer, John Selwyn
Miscampbell, Norman


Browne, John (Winchester)
Hamilton, Hon Archie (Eps'm&amp;Ew'll)
Mitchell, David (Basingstoke)


Bruce-Gardyne, John
Hamilton, Michael (Salisbury)
Moate, Roger


Bryan, Sir Paul
Hampson, Dr Keith
Molyneaux, James


Buchanan-Smith, Hon Alick
Hannam, John
Montgomery, Fergus


Budgen, Nick
Haselhurst, Alan
Moore, John


Bulmer, Esmond
Hastings, Stephen
Morgan, Geraint


Burden, F. A.
Havers, Rt Hon Sir Michael
Morris, Michael (Northampton, Sth)


Butcher, John
Hawksley, Warren
Morrison, Hon Peter (City of Chester)


Butler, Hon Adam
Hayhoe, Barney
Mudd, David


Cadbury, Jocelyn
Heddle, John
Murphy, Christopher


Carlisle, John (Luton West)
Henderson, Barry
Myles, David


Carlisle, Kenneth (Lincoln)
Heseltine, Rt Hon Michael
Neale, Gerrard


Carlisle, Rt Hon Mark (Runcorn)
Hicks, Robert
Needham, Richard


Chalker, Mrs. Lynda
Higgins, Rt Hon Terence L.
Nelson, Anthony


Channon, Paul
Hill, James
Neubert, Michael


Clark, Hon Alan (Plymouth, Sutton)
Hogg, Hon Douglas (Grantham)
Newton, Tony


Clark, Sir William (Croydon South)
Holland, Philip (Carlton)
Normanton, Tom


Clarke, Kenneth (Rushcliffe)
Hooson, Tom
Nott, Rt Hon John


Cockeram, Eric
Hordern, Peter
Osborn, John


Colvin, Michael
Howe, Rt Hon Sir Geoffrey
Page, John (Harrow, West)


Cope, John
Howell, Rt Hon David (Guildford)
Page, Rt Hon Sir R. Graham


Cormack, Patrick
Howell, Ralph (North Norfolk)
Page, Richard (SW Hertfordshire)


Corrie, John
Hunt, David (Wirral)
Parris, Matthew


Costain, A. P.
Hunt, John (Ravensbourne)
Patten, Christopher (Bath)


Cranborne, Viscount
Hurd, Hon Douglas
Patten, John (Oxford)


Critchley, Julian
Irving, Charles (Cheltenham)
Pawsey, James


Crouch, David
Jenkin, Rt Hon Patrick
Percival, Sir Ian


Dean, Paul (North Somerset)
Jessel, Toby
Peyton, Rt Hon John


Dickens, Geoffrey
Johnson Smith, Geoffrey
Pink, R. Bonner


Dorrell, Stephen
Jopling, Rt Hon Michael
Pollock, Alexander


Douglas-Hamilton, Lord James
Joseph, Rt Hon Sir Keith
Porter, George


Dover, Denshore
Kaberry, Sir Donald
Powell, Rt Hon J. Enoch (S Down)


du Cann, Rt Hon Edward
Kellett-Bowman, Mrs Elaine
Prentice, Rt Hon Reg


Dunn, Robert (Dartford)
Kershaw, Anthony
Price, David (Eastleigh)


Durant, Tony
Kimball, Marcus
Prior, Rt Hon James


Eden, Rt Hon Sir John
King, Rt Hon Tom
Proctor, K. Harvey


Edwards, Rt Hon N. (Pembroke)
Knight, Mrs Jill
Pym, Rt Hon Francis


Eggar, Timothy
Knox, David
Raison, Timothy







Rathbone, Tim
Spicer, Jim (West Dorset)
Waldegrave, Hon William


Rees, Peter (Dover and Deal)
Spicer, Michael (S Worcestershire)
Walker, Rt Hon Peter (Worcester)


Rees-Davies, W. R.
Sproat, Iain
Walker, Bill (Perth &amp; E Perthshire)


Renton, Tim
Squire, Robin
Walker-Smith, Rt Hon Sir Derek


Rhodes James, Robert
Stainton, Keith
Wall, Patrick


Rhys Williams, Sir Brandon
Stanbrook, Ivor
Waller, Gary


Ridley, Hon Nicholas
Stanley, John
Walters, Dennis


Rifkind, Malcolm
Steen, Anthony
Ward, John


Roberts, Wyn (Conway)
Stevens, Martin
Warren, Kenneth


Rossi, Hugh
Stewart, John (East Renfrewshire)
Watson, John


Rost, Peter
Stokes, John
Wells, John (Maidstone)


Royle, Sir Anthony
Stradling Thomas, J.
Wells, Bowen (Hert'rd &amp; Stev'nage)


Sainsbury, Hon Timothy
Tapsell, Peter
Wheeler, John


St. John-Stevas, Rt Hon Norman
Taylor, Robert (Croydon NW)
Whitelaw, Rt Hon William


Scott, Nicholas
Tebbit, Norman
Whitney, Raymond


Shaw, Giles (Pudsey)
Temple-Morris, Peter
Wickenden, Keith


Shaw, Michael (Scarborough)
Thompson, Donald
Wiggin, Jerry


Shelton, William (Streatham)
Thorne, Nell (Ilford South)
Williams, Delwyn (Montgomery)


Shepherd, Colin (Hereford)
Thornton, Malcolm
Winterton, Nicholas


Shepherd, Richard (Aldridge-Br'hills)
Townend, John (Bridlington)
Wolfson, Mark


Shersby, Michael
Townsend, Cyril D. (Bexleyheath)
Young, Sir George (Acton)


Silvester, Fred
Trippier, David
Younger, Rt Hon George


Sims, Roger
Trotter, Neville



Skeet, T. H. H.
van Straubenzee, W. R.
TELLERS FOR THE NOES:


Smith, Dudley (War. and Leam'ton)
Viggers, Peter
Mr. Spencer Le Marchant and Mr. Anthony Berry.


Speller, Tony
Waddington, David



Spence, John
Wakeham, John

Question accordingly negatived.

Amendments made: No. 6, in page 2, line 22, leave out 'and'.

No. 7, in page 2, line 25, at end insert:
'and
(d) in subsection (11) the words from "in connection" to "above" shall cease to have effect.'.—[Mr. Alexander Fletcher.]

Clause 2

TRANSFER OF PROPERTY TO SECRETARY OF STATE

Mr. George Robertson: I beg
to move amendment No. 8, in page 2, line 41, at end insert:
'(1A) Any direction given to the National Enterprise Board, Scottish Development Agency or Welsh Development Agency under this section or any transfer from the National Enterprise Board, Scottish Development Agency, or Welsh Development Agency to the Secretary of State shall be made in a statutory instrument requiring approval by resolution of the House of Commons.'
Clause 2 is one of the principal clauses in the Bill and has already precipitated the resignation of the whole board of the NEB and created a widespread sense of dismay throughout many sections of industry associated with the NEB.
By most standards, the clause is important and, only eight or nine months into the life of the Government, it marks a watershed in the development of their policy. The clause could be described as the Government's philosophical apocalypse—the point at which the dog-eared thoughts of Professor Milton Friedman

clash with the realities of industrial life and the Government find themselves in what can only be described as an economic black hole.

Lost from sight are all the high-flown sentiments that Ministers expressed during the election campaign about non-intervention and distancing themselves from day-to-day control of industry. Clause 2 means that we are seeing instead the Secretary of State for Industry and all his acolytes taking powers for deeper interventions in industry than many of my hon. Friends have ever seen.

The amendment seeks to give back to Parliament responsibility for the power that the Bill gives to the Secretary of State. The remarkable thing about the clause is that it gives new, increased and almost blanket powers to the Secretary of State to interfere in the day-to-day working of the NEB and suddenly to take to himself as many of the assets of the NEB as he wishes to lay his hands on.

The amendment is designed to bring back a degree of democratic accountability—which does not seem to have crossed the Government's mind—and to allow Parliament to decide which assets should be transferred from the NEB to the Department of Industry or commandeered by the Secretaries of State for Scotland and Wales.

The more that one looks at the clause—and the enormous attendance in the Chamber indicates that few hon. Members have managed to do so—the more remarkable the powers given to the Secretary of State appear.

One might describe clause 2 as being the nationaliser's dream machine. The Secretary of State for Industry, the high priest of free enterprise, might well, once news of this clause gets out in the country, find himself the darling of the Militant Tendency, because the powers conferred upon the Secretary of State for Industry, without further reference to Parliament, would allow that organisation to realise its target of nationalising 200 companies overnight, with a degree of non-accountable and blanket powers being conferred upon the Secretary of State for Industry—whosoever that Secretary of State might be.

During the Second Reading debate the hon. Member for Knutsford (Mr. BruceGardyne), who is sadly not with us at this stage of the debate, felt so strongly about the provisions being put forward in this part of the Bill that he felt obliged to abstain from supporting the Government that evening. That was on 6 November, not very far into the life of the Government. Yet the hon. Member for Knutsford, who is a recent entrant to the House, coming to depart from the tion, felt compelled to depart from the team that leads the Government, so strongly did he feel that the interventionist powers in this part of the Bill went against his principles. He did so on the basis that the degree of non-accountable powers put forward in the Bill went far beyond what should be expected in a democratic Parliament. He said that for the reasons he illustrated:
I find it impossible to give my support in the Lobby tonight to a Bill which makes no provision—as I believe we should make—to ensure that this sort of evasion of the obligation of parliamentary accountability is ignored in future."—[Official Report, 6 November 1979; Vol. 973, c. 297.]

If the hon. Member for Knutsford and colleagues of his who share the reservations that he expressed on that evening were disturbed on 6 November, they should be even more disturbed this evening, because since 6 November not only have we seen the powers of the Secretary of State for Industry already being exercised in the case of Rolls-Royce, precipitating the resignation of the members of the National Enterprise Board; we have new clauses and new amendments on the Notice Paper this evening that would

strengthen the non-accountable and blanket powers that the Secretary of State already has.

Parliament in no way is strengthened by these additions on the Notice Paper this evening, and the non-accountable powers remain in exactly the same form as those which gave the hon. Member for Knutsford such a great degree of concern then. What the hon. Member for Knutsford expressed in the House that evening and discharged by abstaining in the Lobby that night, many hon. Members on the Government Benches have expressed privately and during sittings of the Industry Bill Committee since then.

What, then, are the circumstances in which the provisions of clause 2 can be exercised? The clause specifies that the Secretary of State will have, without any reservations at all, the power to direct the National Enterprise Board and, in the case of Scotland and Wales, the Development Agencies to transfer assets from their portfolios into the hands of the Department of Industry.

In his Second Reading speech, the Secretary of State for Industry denied that there was any chance that he would be involved in the nationalisation of companies or that he wished to get involved in the day-to-day control of the companies that were involved with the National Enterprise Board. Yet during the Committee stage of the Industry Bill the Secretary of State was challenged to give examples of circumstances in which this power would be necessary, other than the single circumstance that has already been illustrated of the alleged clash of personalities between the National Enterprise Board and the Rolls-Royce board. The Secretary of State said on 11 December:
there might well be the occasional case when the general policy of the Government was that the NEB should dispose, at a time appropriate to the interest of the company concerned and of the taxpayer, of its saleable assets either in whole or in part to the private sector. Where such disposal would take an inordinately long time, it seemed to us unreasonable to leave on the NEB the burden of managing a company for an inordinately long time, a distraction of its management, and a burden upon its financial obligations.

The NEB is to be relieved of its worst management problems by transferring


them, holus-bolus, to the Department of Industry for an undetermined period. Apparently Whitehall knows best. The civil servants in the Department of Industry are apparently in a better position to deal with companies with enormous management problems than are the industrialists whom the Government only recently appointed to the NEB.

The Secretary of State said:
Under the impulse of the duties laid upon it by the guidelines of the time and of the required target return on its investments the NEB might seek to carry out a particular disposal which the Secretary of State thought, in the national interest, was undesirable."—[Official Report, Standing Committee E, 11 December 1979; c. 586–87.]
The Secretary of State was speaking about how he might need to use executive powers if the NEB act against the national interest. The Secretary of State has decided the criteria by which he will transfer assets—companies that employ people—from the stewardship of the NEB and the Government-appointed industrialists to the civil servants in the Department of Industry.

The circle has made its full turn. The The arch high priest of free enterprise and non-intervention has decided that he will take arbitrary powers to decide which NEB assets are undesirable and should be disposed of. At the same time, he issues instructions to the Department of Industry to dispose of as many assets as are needed under the public sector borrowing requirement.

The Government's argument is that the powers are necessary to provide a two-way flow of assets between the NEB and the Government. The Government seem to have misunderstood the logic of the last Government. It was no accident that the last Government decided not to give themselves power to hand back assets from the NEB to the Department of Industry. That decision was taken because of the need to maintain a balance. It was decided that assets should be placed at arm's length and transferred to an agency operating in a commercial sphere. The Government decided that it was not logical for them to demand at a minute's notice that companies operating in a commercial sphere should be returned to the public sector.

I ask the Under-Secretary of State for Scotland to explain what his view would have been if a Labour Secretary of State for Scotland had decided to take the powers that the Government intend to take under the Bill. If he were in Opposition, he would say that such a move was a charter for the nationalisation of any number of companies. He would have said that it was an irresponsible use of Government power.

The Under-Secretary of State for Scotland (Mr. Alexander Fletcher): The hon. Member for Hamilton (Mr. Robertson) misunderstands the clause.

Mr. Robertson: I may have misunderstood, but the National Enterprise Board does not. It has lost a board of senior industrialists in the process of comprehending what the clause is about. Many people in industry are about to discover the practical implications.
What will happen in industry when this clause becomes law—if, indeed, it does after this afternoon—is that those companies that are attracted to the NEB by the blandishments of the Government and their agencies will see the prospect of forced partnerships with organisations and companies that they perhaps sought to avoid by going to the NEB in the first place.
Perhaps more important is the direct intervention by the Secretary of State for Industry. In his Second Reading speech, he said that although the Government would trim the powers of the NEB they still saw it as having a residual role to perform. Therefore, the Government left the NEB with powers and money. One of the areas in which the Government claimed that the NEB could still contribute—even within the restricted vision of the Secretary of State for Industry, and even with his ideological opposition to it—was the area of high technology, where the private sector has been so glaringly absent in the past.
In May of last year, coincidental with the election that was won by the Conservative Party, the Bow Group published a document called "The NEB under the Tories". In the preface to that document, the six authors said:
The conclusions which are presented in this paper, therefore, represent an industrial view of the NEB, and how it can be used by


the Conservative Government in pursuit of its economic and industrial objectives.
That document was completed after a major survey of industrial opinion by the Bow Group writers.
One of the principal conclusions of the pamphleteers was:
Many of those we spoke to thought that given the considerable reluctance of U.K. companies to invest in new, high risk industries, this facet of the present activities of the NEB was its major success.
That paper highlighted time and again that private enterprise and private capital was not providing the resources for the high-risk areas of technology. It was highlighted in that document that even in capitalist economies of countries such as America, public intervention was sometimes required in a pump-priming form to provide the necessary take-off.
The Secretary of State for Industry, who can hardly be described as interventionist in character—although the Bill seems to prove the contrary—also underlined that role for the NEB in his Second Reading speech. Yet could anyone in the House with any experience of industry, especially high-risk technology, believe that industrialists, with their skills, abilities, ideas and enterprise, would involve themselves in an operation when there was a risk that the Secretary of State—or, more likely, the civil servants within his Department—would decide that it was fair game for nationalisation or appropriation by the Department of Industry, the Scottish Office or the Welsh Office? Is it likely that they would get involved when there was a possibility that the organisation could be taken into the public net and possibly sold to the highest bidder? I cannot think of anything more likely to dull the idea of stimulating high-risk industries and entrepreneurs than that sort of threat hanging over those who are attracted to the NEB.

Mr. A. P. Costain: How does the hon. Gentleman explain that the NRDC is doing so much work? Why cannot that organisation take on this work? It is doing a good job and is not going to be removed.

Mr. Robertson: The hon. Member for Folkestone and Hythe (Mr. Costain) mentions the NRDC. That organisation has an extremely limited role at present and its finances in no way stretch to backing

the commercial judgment that would be involved in developing high-risk technologies. The NRDC is a technical institution with some expertise in this area, but it has quite properly been denied the sort of venture capital that is involved here.
What the NEB should do, and what the agencies are doing, is to examine the commercial potential of such areas and take risks. If we are to compete in the future, we must achieve the competitive edge now. Even the Conservative Party members who wrote the pamphlet to which I referred recognised that that was true. The Secretary of State for Industry, among his readings of the decaying volumes from Chicago university, seems to have picked up the fact that there was a degree of reality and commendable value in that part of the pamphlet.

Involved with this clause and the Bill is the destruction of the arm's length relationship that previously existed in relation to the Civil Service, so decried by the Secretary of State and Conservative Members before they came to power. It is a positive limitation on the flexibility that will exist between the sort of role conceived and even retained for the NEB and a distinct narrowing of the commercial freedom envisaged in the previous NEB guidelines, and yet it is still pretended by the Government, in their conversations with Sir Arthur Knight, to be the main basis of the relationship today.

Indeed, the new guidelines for the NEB seem specifically designed as a charter for intervention by the Secretary of State for Industry. He has given himself brand new powers to intervene in the day-to-day running of the NEB. The Under-Secretary of State for Scotland is there as a vulture hanging over the head of his new chairman of the SDA.

I have some experience as a former board member of the SDA. Perhaps I can therefore conceive in more graphic terms of how the board members must feel with the prospect of the Under-Secretary of State for Scotland hanging over their heads, or even around their necks at times, when they come to make commercial decisions about their assets.

The draft guidelines for the NEB—and we must remember that the NEB has the


Secretary of State for Industry around its neck—say:
The Secretary of State is answerable to Parliament"—
but not much—
for the exercise of his statutory powers, but he will not normally use his powers of specific direction to intervene in day-to-day matters.

The arm's length relationship was conceived as being a valuable addition to the work of the NEB, but we are now going back to the days of day-to-day control by politicians in the commercial affairs of a State holding company.

The guidelines go that bit further, because in two key sections under the disposal of assets the guidelines say, first, that
The Board shall obtain the approval of the Secretary of State before they dispose of voting shares or stock.
Hon. Members should know that those words are underlined and that the meaning of the underlining is that they have legal force. That particular sentence has the force of law, and the sentences in the draft guidelines that are not underlined do not have the force of law.

Paragraph 12 of the draft guidelines says:
The Secretary of State has statutory power to direct the Board to dispose of, or transfer to him, securities and other property. These powers do not override private rights limiting share transfers, such as those in private companies' Articles of Association.

What is particularly important about these two quotations from the guidelines is that one has the force of law—the obligation of the board to consult the Secretary of State—but the Secretary of State's statutory powers to direct the disposal of and transfer of assets do not have the force of law. We are, therefore, weakening parliamentary control over the affairs of the NEB and at the same time strengthening the arbitrary powers of the Secretaries of State for Industry, Wales and Scotland. That is a retrograde step.

Mr. Grylls: If the hon. Gentleman refreshes his memory by looking back at the 1975 Act, he will find that sections 5 and 7 gave considerable arbitrary powers to the Secretary of State and that Parliament was not involved at all when those decisions were taken. The only way that Parliament knew anything about matters was when a bit of paper was laid in the

Library. There was no statutory instrument, so why ask for one now? The Labour Government never had one under their Act, so why are the Opposition asking for one now?

Mr. Robertson: If the hon. Member is as concerned as he makes out in dealing with the detail of the Bill—perhaps he is looking at it afresh for the first time—he will find that the powers conferred upon the Secretary of State for Industry are considerably greater than any powers conferred on the previous Secretary of State under the 1975 Act. Let me read out again what those powers are:
The Secretary of State has statutory powers to direct the Board to dispose of, or transfer to him, securities and other property.
The Bill introduces such new powers for the first time which give the Secretary of State considerably greater discretion to do what he wants without even tabling an order.

Mr. Grylls: With great respect to the hon. Member, when shares or securities were transferred from the Secretary of State when the NEB was set up in 1976, that was on the decision of the Secretary of State. Parliament was not consulted. The shares of British Leyland, Alfred Herbert, Ferranti and ICL were all transferred to the NEB and Parliament was not consulted in any way.

Mr. Robertson: The hon. Gentleman misses the point completely. The Industry Act 1975 was specifically designed to give an arm's length body control over assets that were being managed at that stage by the Department of Industry or its equivalent. One-way transfer was conferred upon it in order that the exact parallel operation that is being embarked upon here would not happen. We are talking about the Secretary of State taking upon himself the power to demand that the NEB disposes of its assets. More worryingly, if one is a democrat, we are talking about giving him the power to dictate that the assets be transferred from the NEB back into the Department of Industry. That is quite arbitrary and without any parliamentary control. We are destroying the idea of a commercial body taking commercial decisions and going back—if we ever believed it—to the idea that the Civil Service is capable of running industry in a day-to-day way.
It is clear from the clause that the Government are not interested in helping or supporting industry. They are not even interested in stimulating industry. What they are interested in is pursuing preconceived idea logical will-o'-the-wisps which are not born out of industrial reality—or even derive from their supporters in industry and on the NEB—but come from the imagination of the Secretary of State for Industry and his numerous friends in the Cabinet. They seem hell-bent on keeping going in their own unique direction, despite the way in which the world keeps disobeying their predictions and performances. I commend the amendment to the House.

Mr. Cryer: For a number of reasons, it would be of advantage if the amendment were passed, not least in the interest of democratic accountability. However, there are other reasons. The amendment is only a sticking plaster to try to provide some democratic accountability in a Bill which is the latest in a string of denationalisation measures which we regard with total anathema and to which we are totally opposed.
We believe the Bill to be against the interests of the nation as a whole and we have a duty to oppose it and to try to make it reasonable legislation to the best of our ability. We have to bear in mind that we are a minority and that the Government use their majority to push matters through as they choose. This is a bit of sticking plaster to put over one of the cracks in a shabby little doctrinaire Bill that is a compromise between the Right-wing extremists in the Tory Party—I notice that the Chief Secretary to the Treasury is gracing the Front Bench—and other Conservative Members. One wing wanted to get rid of the NEB entirely. I see endorsement of that point of view from another Right-wing extremist on the Tory Benches, the hon. Member for Wycombe (Mr. Whitney). The other body of opinion felt that there might be some value in the body and that some assets should not be sold off. The taxpayer will be the loser.
Under clause 2, the NEB is subject to instruction to sell off assets. The bits that are sold off will not be those that are unprofitable. They may be vital to the national interest, but that will not interest the greedy friends of the Conservative

Party who contribute to its coffers. Those people expect some rich dividend in the form of assets. Alfred Herbert will not be sold off, because it is in a critical position. That company is vital to the national interest. It is an important component in the machine tool manufacturing industry. Such companies are vital in a manufacturing nation.
If a section is profitable, representations will be made to the Secretary of State from some of the Tory front organisations that hover about on such occasions. Representations will be made by large concerns that are keen to pick up a few succulent morsels that the taxpayer had previously rescued. Those industries will be hived off. Such concerns are interested not in the national interest but in their own self-interest.
The Government argue that the self-interest of those wonderful people who are now motivated by the tax concessions of the last Budget can be identified as the national interest. However, our experience does not bear that out. Our experience has not been that those wonderful gents pour their money into the efforts of British working men and women. They pour their money into the area that will provide the fastest buck. At the beginning of the Heath era there was a property boom.

Mr. Deputy Speaker: I am sure that the hon. Gentleman will relate his point to the amendment. He is going rather wide of it.

Mr. Cryer: I was just coming to that point. I am pleased, Mr. Deputy Speaker, that you have anticipated my next words.
Clause 2 is very important. It concerns directions to the NEB and to the Scottish and Welsh Development Agencies for the disposal of assets. When those directions are given, they will be given in the knowledge that the assets to be disposed of are those that will serve the taxpayer best. The taxpayer will be denied those benefits, because unprofitable sections that are important to the national interest will not be readily saleable.
The point that I was about to make, Mr. Deputy Speaker, when you so helpfully intervened, was that the nation's experience is that people are motivated not by the national interest to buy assets but by their own self-interest. In the early


1970s they did not care that money was needed for machinery, plant and equipment. Massive tax concessions were given, but they poured their money into property where money was not needed. Those are the values of the Government's supporters. Such people have influence and they penetrate the Government. They can make representations because they have an identity of values and attitudes.
It is a bad deal for the taxpayer who rescued those businesses. Through the NEB, taxpayers took the risk. Part of the NEB's purpose is to take a risk where private enterprise is not prepared to do so. Companies were picked up and turned into successes. All credit is due to the management and people in those companies. The taxpayer, having invested risk capital that could not be obtained under the conventional capitalist system, will lose those assets. The Conservative Party thinks that the capitalist system is wonderful. However, the taxpayer is now being kicked in the teeth. The reward for risk-bearing—the reward for the entrepreneur whom the Adam Smiths of the Tory Party hold up as an idol—will go not to the taxpayer but to the friends of the Conservative Party. That is our basic objection.

Secondly, the clause gives directions to enable the Secretary of State to hold part of the NEB or agency assets. That is a strange development. The Government did that in the British Aerospace Bill and the Civil Aviation Bill. In the case of British Aerospace, two civil servants will each hold a £100 company, pending the emergence of a larger company in which shares will be sold.

Here we shall have a subsidiary company, held by the Secretary of State or his nominee. Who will that be—Sir Arnold Weinstock, who works closely with the Department of Industry? Will it be a civil servant, as with British Aerospace?

There is a great deal of public concern that top, elite civil servants, such as permanent secretaries—and I am not talking about ordinary civil servants who do a good day's work and play a vital part in Government administration—when they retire, hop into the boardrooms of large and influential companies with which they have been dealing. More companies will now come under the Department of Industry,

and they will be intimately connected with some of those civil servants.

We need more stringent rules so that those civil servants do not retire into the boardrooms of the companies that the Department holds. The danger is that their judgment may be blurred m anticipation of future benefit for themselves.

We know that the practice goes on. Sir Antony Part, who was permanent secretary at the Department of Industry, leapt into the boardroom of Lucas Aerospace and several insurance companies. He is doing rather well for himself.

With 1½ million unemployed, there should not be that duplication of jobs and moonlighting. My hon. Friend the Member for Hamilton (Mr. Robertson) drew attention to the necessity for keeping those arrangements at arm's length. Arrangements should be uniform throughout the NEB's activities, which would be a safeguard against individual preferential relationships building up within the confines of the Department of Industry.

The Minister may assure the House that the arrangements will work. However, on retirement senior civil servants appear to be able to manipulate themselves with ease into these positions. A civil servant may be released, for example, from a merchant bank to work in the industrial development unit for three or four years. He does not find his way back into the merchant bank, as should happen under the terms of his contract. He may go to a company such as GEC, where he had a working relationship with the vice-chairman. That happened in the past. We are too soft about such occurrences.

The clause could facilitate such arrangements. I am against that. Many civil servants untiringly devote themselves to the public good. It is too easy to bring all civil servants into disrepute when a tiny number act in that way.

Mr. Budgen: Does the hon. Gentleman agree that the problems to which he refers are an inevitable consequence of a too large public sector and too close involvement by the State in the affairs of individual businesses?

Mr. Cryer: That would be true if those civil servants went to the public sector. They do not. They go to the private sector. An extraordinary fact is that during the past five years of Labour Government


many members of the CBI, together with business men up and down the country, criticised civil servants hand over fist. They said that civil servants could not make decisions. They said that the men in Whitehall, who do not know best, were dictating to them. Yet they chase those men from Whitehall as soon as they retire and snare them into the boardroom because of their knowledge.
It is a question not of the size of the public sector but of the determination of the Government of the day to lay down tight ground rules.

Mr. Budgen: What about Roy Jenkins?

Mr. Cryer: I am not concerned with what Roy Jenkins said about the size of the public sector. I am not sure whether he is still in the Labour Party. He has never been a concern of mine.
As the clause gives power to the Secretary of State to allow the assets to be held by the Secretary of State or his nominee—that means that the power would be held by civil servants—the problem would be solved by the announcement of tighter rules, the implementation of existing rules and the ending of this constant succession of waivers to the top people. I shall not pursue the matter any further as it has been covered exhaustively.
I wish to speak about accountability because the amendment contains the words
to the Secretary of State shall be made in a statutory instrument requiring approval by resolution of the House of Commons.
That means that it comes to the House for affirmative approval, and there is nothing wrong with that.
I have consistently held the view that under successive Governments there should have been more statutory instruments subject to affirmative resolution. The statutory instrument procedure is less than satisfactory. About 2,000 instruments are made every year. They are a necessary arm of government. As the Secretary of State has said, we have a regulatory framework. It is surprising that, when we have such a kind private enterprise system, the Government apparently need such a comprehensive regulatory framework. Nevertheless, it is clear that they do.
Laws that affect people can be put through the House, and the only way that one can find out about them is if one is eagle-eyed. One then puts down a prayer and, with luck, the prayer will be debated. We know that the balance of probability against a prayer being debated is high.
The only sound means of having a prayer debated is if the Front Bench supports it, or if a few Privy Councillors—because of the manner in which the House works—put their signatures to it. There may then be a chance that debating time will be granted. I do not regard that as satisfactory. It is far better that the House should have affirmative resolutions for statutory instruments, which would bring them to the Floor of the House.
I still take the view—it is not the traditional view that is the guiding light of my right hon. Friend the Member for Ebbw Vale (Mr. Foot)—that the Chamber is important and should be used to air views and to raise issues. It is important that it should remain so. If an instrument is introduced, an opportunity for debate arises.
It could be argued by the Government that if there were too many affirmative resolutions they would choke the business of the House. That might not be a bad thing, especially in view of some of the current business of the Government. That is a problem that we would have to solve. Many hon. Members would say that it is a better system, that we must solve it and that we must find more time or establish a system whereby these matters can be dealt with. The principle of accountability on the Floor of the House is right because of this factor.
The Government recognise that the NEB has a role to play. We say that it has an important and dynamic role to play. The Government are cramping the role of the NEB, but it does have a role. There is that common factor between the parties, so it is of importance. Yet the Government are giving powers to the Secretary of State to dispose of assets with virtually no scrutiny at all. If it is a matter of importance to a greater or lesser degree on both sides of the House, it should, by common consent, be of sufficient importance to be brought to the Floor of the House.
I submit that it is wrong to hive off anyway, but, accepting that our will is not likely to prevail in view of the balance, the taxpayer will get a bad deal.
Another point to be borne in mind is that Back-Bench Members do not have carte blanche in asking questions in this place. If one asks certain questions, one is told that, because it is part of the rules of the House, it is a matter of internal Government administration. There are times when that is incompatible with the democratic examination of factors that Members of Parliament need to examine. With the affirmative resolution procedure, we cannot be fobbed off with the bureaucratic reasoning that it is an internal Government matter if we put down questions about the hiving off of assets.
I emphasise that to varying degrees in the House it is accepted that the NEB is an important body. It consists of taxpayers' assets. Taxpayers have taken a risk. Therefore, we reasonably ask, as of right, that the taxpayers' representatives should have the opportunity of debating the Secretary of State's decisions on these matters and that that should be by way of affirmative resolution, as the amendment suggests.

Mr. Alexander Fletcher: Perhaps I might intervene at this point in the debate in view of the wide-ranging remarks made by the hon. Member for Hamilton (Mr. Robertson) in moving the amendment.
The hon. Gentleman suggested that this was a blanket clause. It is not. It is a part of the Bill which we envisage will rarely be used. The hon. Gentleman's expression was "a nationaliser's dream machine". When he made that point, I suggested that he had misunderstood the clause.
The hon. Gentleman will see in the explanatory and financial memorandum:
Clause2 empowers the NEB and the Agencies to transfer assets held or controlled by them to the Secretary of State and extends his powers of direction to enable him to require them to transfer assets to him.
The assets referred to are already in public ownership. That is an essential part of the clause. That is why I said that the clause would rarely be used. Therefore, I repeat that the hon. Gentleman, unusually for him, did not comprehend the nature of the clause.

Mr. George Robertson: The Minister does not understand the clause. He quoted from the explanatory and financial memorandum. The clause refers to the transfer of assets. It does not state that the assets have to be 100 per cent. securities in the companies concerned. It is the transfer of the assets which, at that stage, may be only partially in the public sector. I am sure that many of the hon. Gentleman's hon. Friends will be disturbed at the prospect of any Secretary of State taking upon himself powers to direct assets, even partially acquired assets, from the semi-public sector to the wholly-public sector.

Mr. Fletcher: The hon. Gentleman has now qualified the point that he was making. The fact remains that we are talking about the direction of assets. In these exceptional cases it is almost certain that these assets, from the majority shareholding point of view, will be owned either by the agency or by the Secretary of State.
The purpose of the clause is to deal with companies whose scale or complexity of operations, or whore commercial position in the country, presents considerations of national interest—important considerations which could perhaps overwhelm the NEB or the agencies in the conduct of the affairs of these businesses. That is a factor that must be taken into account if one looks at the balance of a company such as Rolls-Royce as part of the plethora of the NEB and the size and importance of Rolls-Royce in relation to the other activities of the National Enterprise Board.
The hon. Member for Hamilton again indulged in what I have previously described as the claiming of an exaggerated role for the National Enterprise Board and the development agencies. This was not particularly relevant to the debate, but I should like to refer to the Scottish Development Agency and its investment role. It is important to remember that, on an annual basis, the value of the investments that the SDA has made, and is likely to make, is less than 1 per cent. of the total manufacturing investment that takes place within the manufacturing sector in Scotland in any one year. It does a disservice to the community at large to present the NEB or the agencies as some great saviour from the economic


difficulties and the problems that face people in various regions. It is wrong to exaggerate this role. It was mentioned a number of times in Committee, and it has come up again in the course of the debate.

Mr. George Robertson: That has nothing to do with it.

Mr. Fletcher: It has this to do with the clause. The hon Gentleman, in presenting his amendment, indulged in exaggeration of the importance of the role of the NEB and the agencies in relation to the situation in the economy generally. This was a point that my right hon. Friend the Secretary of State tried, in previous debates, to put in some sort of scale for the benefit of Opposition Members.

Mr. James Lamond: The hon. Gentleman is explaining that clause 2, as it stands, allows the transfer of assets. He has given some possible reasons why they might be transferred, which I accept. Circumstances can arise which require the transfer of assets. However, I was under the impression that the amendment asked that the transfer of these assets should be subjected to examination by the House before the transfer is agreed so that those who work in National Enterprise Board companies would be satisfied that there was good reason for it. Will the hon. Gentleman address himself to the amendment and say why he feels that it is not necessary for the Government to explain the reasons for wanting to transfer these assets?

Mr. Fletcher: I shall come to that point. It is unfair of the hon. Gentleman to suggest that I should be strictly confined to the amendment and its purpose when speeches by Opposition Members strayed far from that point. I am replying to some of the points that were made by Opposition Members.
The hon. Member for Hamilton referred to the guidelines requirement that the NEB should consult the Secretary of State about disposals. That requirement was laid upon the NEB by the right hon. Member for Chesterfield (Mr. Varley) when he was the Secretary of State, and the reference to the existing rights of shareholders does not need to be given

the force of a statutory direction as it is a statement of the law.
The hon. Member also suggested that the new clause and the amendment to clause 4 add to the lack of accountability in clause 2. That is not correct. One of the reasons for introducing the new clause rather relying on powers in other legislation is to provide a measure of accountability which is appropriate to Parliament today.

Mr. George Robertson: The amendment to clause 4 and the new clause do not strengthen the powers of public accountability. They provide new ceilings for loans and guarantees that might be given to companies that come into the hands of the Secretary of State for Industry. If they have no need of loans or guarantees, no public accountability is involved.

Mr. Fletcher: The amendments cover the points made by the hon. Gentleman.
The hon. Member for Keighley (Mr. Cryer) was perhaps close to being out of order, but he demonstrated once again one of the basic ingredients of Britain's current economic and politicalproblems—the desire to prolong the class war. It is very much a phoney war. It is an essential part of the strategy of the Labour Party, and without it that party could not survive. I suppose, therefore, that the hon. Gentleman should be allowed his daily dose of envy.
The amendment refers to the fact that the Secretary of State is already required under section 7 of the Industry Act 1975 to lay before each House of Parliament a copy of any direction that he may give to the NEB. There are similar provisions for the Scottish and Welsh Development Agencies. Clause 2 extends these requirements to directions made as to transfers of property to the Secretary of State. However, the amendment proposes that such directions should be subject to the approval of this House.
It is not clear whether the purpose of the amendment is that all transfers under clause 2 would be subject to such approval or only transfers made under direction. In either case, however, I believe that the proposal would be inappropriate. The clause 2 power is a counterpart of section 5 of the 1975 Act. That provides that the Secretary of State may, at his discretion, transfer publicly


owned property to the NEB. The approval of the House is not required for such transfers, and I do not see why it should be thought necessary when events flow in the reverse direction. The hon. Member for Hamilton did not complete his argument on that but presented only one side of the picture in moving the amendment.
There is a separate question of principle. The exercise of the Secretary of State's power of direction under section 7 of the 1975 Act is not subject to the approval of the House. That power is very wide. It extends to the exercise by the NEB of any of its statutory functions, and so to the whole range of its activities. It would be illogical to apply a constraint to the Secretary of State's use of a different power of direction which is of such limited application, especially as there is no constraint on its counterpart. That is why I invite the House to reject the amendment.

Mr. Tom Ellis: My hon. Friend the Member for Keighley (Mr. Cryer) said that our objection to the clause and the reason for our amendment was that the rewards would go not so much to the taxpayer as to the friends of the Conservative Party. I agree with him. That is an objection, though not the basic objection. There are more substantial objections. I also agree with my hon. Friend about the need for accountability. Accountability is a different issue, and my hon. Friend made the point that we are introducing a kind of second-best amendment. We are trying to salvage something from the wreck. I make my contribution in the light of that "second-best" approach.
The clause as it stands follows quite naturally from clause 1, which expresses the fundamentalist notion of ownership held by Conservative Members and the Government. They feel that there are two kinds of ownership—private ownership and public ownership. The reality is far more complex. There is a multiplicity of kinds of ownership, which have their origins in the nineteenth century. We start with the entrepreneurial concept and move on to institutional ownership and from there to the example of the little old widow putting her money into an insurance company. Ownership comprises those people who buy shares and

includes the concept of the NEB. Government shares in such enterprises as BP and our stake in the nationalised industries are other forms of ownership. That is an enormous range.
It is a pity that the Bill over-simplifies the nature of ownership. That idea of ownership will lead this country one step further along the road of chronic decline that we have been treading for so long. That is the fundamental reason for our amendment and why we are trying to alter the nature of the Bill. There is a desperate need in this country to arrest and reverse that chronic decline. The Bill, and this clause in particular, is a paradox and an anachronism. If the Tories say that private enterprise is good and public enterprise is bad—

Mr. Deputy Speaker: Order. We have ranged pretty widely in this debate, but we are concerned with the question whether parliamentary approval should be sought for this. I hope that the hon. Member for Wrexham (Mr. Ellis) will keep to the point.

Mr. Ellis: I will come rapidly to the specific point, Mr. Deputy Speaker. I was merely seeking to explore a point, and I apologise.
The specific amendment deals with ministerial control on the one hand and parliamentary control on the other, and we should be considering the merits and demerits of the two types of control. In industrial Britain, against the background of public ownership, I believe that both types of control are unsatisfactory. They have far more weaknesses than strengths.
I could quote many examples of the weaknesses of ministerial control. Clause 8, as it stands, strengthens ministerial control, despite the fact that the hon. Gentleman says that it is an academic issue and that that control will rarely be used. The clause gives the Minister considerably greater power—"influence" is perhaps a better word—in any company owned by the State.
I could give many examples, but I will cite only one. I know about it because at the time I was a full-time exployee in the coal industry. My example concerns the pricing policy of the National Coal Board in the 1950s, when there was a desperate shortage of coal for two or three years. The Board, which had a statutory


duty to fix its own prices under a kind of break-even arrangement, taking a good year with a bad year, had a gentleman's agreement concerning pricing. There was no question of a legal document. The issue was decided by something as vague as the influence of the Minister who decided that a certain price should be charged for coal.
For a time we were importing coal from America at one price and selling it on the British market at a lower price, and if I remember rightly £73 million was lost on the deal. This was done for purely political reasons, and the National Coal Board carried the can. There are many examples that I could give to illustrate that sort of ministerial influence. This is wholly bad, not in the short-term

sense of "doing a fiddle", as in the example that I have just given, but in influencing policies in an industry for all the wrong reasons. An element of political capriciousness becomes dominant in that industry, and as a result there is a lack of continuity in policy and all the consequential failings that are suffered by so many British industries—

It being Ten o'clock, the debate stood adjourned.

Ordered,

That, at this day's sitting, the Industry Bill may be proceeded with, though opposed, until any hour.—[Mr. Boscawen.]

Question again proposed, That the amendment be made.

Mr. Ellis: The ministerial control, as it stands and as it will be when it is strengthened by the proposals in the clause, is bad for British industry. Certainly it is bad for British industry that is publicly owned and in which the Minister has considerable influence and authority.
As a last resort, one is obliged to put forward an alternative. The alternative that we suggest is some kind of parliamentary control. I am forced to accept that this is manifestly unsatisfactory. I cannot help but feel that when the steel Sub-Committee of the Select Committee of the House summoned the chairman of the British Steel Corporation to give evidence, it was redolent of the nineteenth century approach.
It is most unsatisfactory to have a Committee of Members sitting down formally for two or three sessions during the afternoon scrutinising the affairs of as complex a concern as the British Steel Corporation. That simply cannot be done. It would need a permanent investigation of several weeks or even months of the affairs of that Corporation before we could reach any sort of satisfactory conclusion about the nature of the problems, how they were being dealt with, and the efficiency of the management. I am the first to accept that parliamentary control, as such, is unsatisfactory.
Having said all that, one must accept also that while it may be true that a Government may publicly state that they have given a directive, they may not say that they have squeezed someone's arm. If it is written into the Act that the Government's decision to instruct a company must come to the light of day in this House, at least some responsibility will be placed on the Minister concerned. Whatever the consequences for the industry, the results—good or bad—would land fairly and squarely on the shoulders of the Minister concerned. For that reason we are perfectly right to suggest this amendment, which I support.

Mr. Grylls: The Opposition arguments so far have been about the NEB. If they have done nothing else, they have proved the point made earlier by my right hon. Friend the Secretary of State for Industry that there is a deep divide of comprehension

between the two sides as to what industry is all about.
The hon. Member for Keighley (Mr. Cryer) showed in his speech a degree of lack of comprehension that was even more amazing because at one time he was actually a Minister in the Department of Industry. His speech was pure humbug. When he was a Minister, he was responsible for transferring to the NEB assets then held by the Secretary of State. There were no statutory instruments when that happened in 1976. Because we propose to transfer the assets back to the Department of Industry in certain circumstances, he claims that it is all wrong, yet we are proposing to transfer them in exactly the same way as the hon. Member did. People listening to this debate will wonder what it is all about. There is no doubt that there is a good deal of humbug involved.
During the last Parliament I was critical of the NEB. I was particularly critical of its lack of accountability to Parliament. The Public Accounts Committee—the senior Select Committee of the House of Commons—recommended to the then Labour Government that the Comptroller and Auditor General should be allowed to look at the books and to make sure that everything was all right. The Labour Government resisted that. So far, we have not been successful with the present Government on that matter. The only thing that I can say in defence of this Government is that there is less activity, so perhaps there is less need for the Comptroller and Auditor General.
One good point about transferring shares from the NEB to the Department of Industry is that the Comptroller and Auditor General will be able to get his hands on the companies concerned and examine the books. The Opposition should agree that it is a good thing to bring the shares back into the Department of Industry.
The argument is not about the disposal of shares. It is about transferring them from the NEB into the Department of Industry. The silver lining to the argument of the Opposition—who are against any tinkering with the NEB—is that when the shares are transferred back, the Comptroller and Auditor General will be able to look at the companies and he will


be able to tell us what is going on. That is a good point.
I draw the Opposition's attention to section 2(2)(c) of the Industry Act 1975, which states that one of the functions of the Board shall be to extend
public ownership into profitable areas of manufacturing industry.
The NEB could do that without any reference to the House, without a statutory instrument, and without any overseeing by the Comptroller and Auditor General. All the decisions of the NEB can be taken without reference to Parliament. Yet we have heard supreme humbug speeches from the Opposition, suggesting that there should be a statutory instrument, with all that that entails, for the simple action of transferring shares back into the hands of the Secretary of State. The public will see the rough side of Socialism. When it comes to extending the frontiers of Socialism, it can be done without any reference to the House. On the other hand, when the Government believe that it is better, for example, for Rolls-Royce to be under the wing—if that is the right way of putting it—of the Department of Industry rather than the NEB, there is a great deal of excitement about statutory instruments and so on.
I believe that amendment No. 8 should be discarded. I shall be glad if the few remaining shares that remain under the control of the NEB after a few years of Conservative Government are transferred to the Department of Industry. I should like the Comptroller and Auditor General to look at the books and see how the taxpayers' money is being wasted.
This is a humbug amendment. It should be disposed of quickly. The House should reject it and show clearly to the public that there are two facets to Socialism. When it is extending the frontiers of nationalisation it can be done in secrecy, with no reference to it, but when a modest change is proposed there is a cry for parliamentary control.

Mr. James Lamond: It is surprising that Conservative Back Benchers object to the amendment. It is simply trying to ensure that when the Government make such a decision there is a possibility of examining the reasons for doing so. The argument is not about extending the frontiers of Socialism or whether there are

times when it is necessary to make transfers. I accept that it will be necessary to make transfers from time to time, for various reasons. I object to the fact that Parliament will not be given the opportunity of asking, if necessary, why such action is then taken.
We are told that such action would be taken on only exceptional occasions, so it cannot be argued that debating the matter on the Floor of the House would take a great deal of time. Hon. Members who have an interest in a company, perhaps because they have constituents employed there, will obviously wish to find out what is happening to it.
My hon. Friend the Member for Keighley (Mr. Cryer) made a fine speech and covered a number of important aspects. He made the general point about the need for the House to be able to raise questions on statutory instruments and approve them before they can be put into effect.
I want to put a more particular case. Thousands of my constituents work for Ferranti's, which is owned by the NEB. We can speak of the need for Parliament to know and the need to safeguard the taxpayers' interest, and so on, but I am concerned more about the rights of workers to know what is being done to the company that employs them.
Hon. Members should not think that employees are not interested. A number of my constituents who work for Ferranti's recently invited me and other hon. Members from the Oldham area to meet them, because they were distressed about the future of the company. They knew that changes were on the way and that there was little that we could do, since the Labour Party lost the election, but they did not know what was to happen to the company.
If a transfer of Ferranti assets is proposed, the employees will hear of it and will ask me what is happening. I shall write to the Minister, but that is not the same as being able to debate the matter and question the Minister on the Floor of the House, which is what the amendment is designed to achieve.
Hon. Members may not wish to object to the Government's action. They may recognise the reality of the Secretary of State's position or concede that it will result in an improvement in the prospects


of the firm and the workers. Hon. Members may be happy to approve the statutory instrument, but they will want to know what is happening so that they can inform their constituents whose lives are tied up in NEB companies and who may have spent their whole working lives in those firms. Surely those workers are entitled to know what the Government intend to do, especially as changes can so sharply affect their futures.

Mr. Tom McNally: My right hon. Friend the Member for Deptford (Mr. Silkin) rightly described clause 1 as the body of the Government's industrial strategy. Clause 2 shows how they intend to dispose of the body, and the amendment is an attempt to snatch the body back into public debate.
I have listened to most of our debates today and I have heard no recognition from Ministers—and little from Conservative Back Benchers—of the fact that we are talking about the jobs and working lives of men and women and the investment that they have put into industry. I am surprised that the Government oppose the amendment. If they are to daily with workers' jobs and lives, they have a duty to justify themselves to the House.

I think that it is a rather sad and ironic debate, because I do not think that either side of the House can claim to have in its back pocket a flip solution to Britain's industrial problems for all the 30 years—as the Secretary of State has said, perhaps 100 years—of industrial decline.

Sir Keith Joseph: Relative decline.

Mr. McNally: Relative industrial decline; I take the right hon. Gentleman's point.
What is worrying is that in his statements in the House and elsewhere, both in Government and in Opposition, he has shown an almost fanatical obsession with a single solution—this "magic hand" of the market. It is that which really worries me in clause 2, giving him so much power over industry. The Minister was right when he said that the NEB and the various agencies had had relatively small control over the whole range of industrial investment. Indeed, those who prepared the pre-1974 Labour Party programme probably regretted that it was so small during the period 1974–79.

But, if it so small, why are the Government so vindictive? Why such a determination to curb the National Enterprise Board?
I do not want to make a constituency speech this evening, but I have to say that within my constituency a very large number of people work for Fairey Engineering, for Ferranti and for ICL. A large number of those people ask me why they are doing this, what did they do wrong; what is the sin of which the NEB is guilty to give rise to the Bill and this whole thrust of Government policy.
We were told earlier that the NEB was to be a kind of rampaging monster of Socialism let loose on the land. In fact it turned out, as I know from my own experience and from industrialists in my constituency, to be a rather amiable beast in that respect. Industrialists began to build up a rapport with the NEB; they began to trust its judgment and, in times of difficulty, they saw the help of the NEB at the time as giving stability and a little forward look to their company.
What I find difficult to understand and what I have not heard mentioned at all today is why, when the NEB has performed for many thousands of my constituents a very valuable task in preserving their jobs and for the country in preserving industries, design teams and whole organisations that would have been dispersed, not once today have we heard any detailed criticism of its performance. As a result of that good work and that confidence between management and workers, we have this little piece of petty vandalism by the Secretary of State in particular.
I worry, because I am asked continually by constituents of mine who work for NEB firms what are these powers that will be given to the Secretary of State. Who will be consulted, and how? I heard the hon. Member for Bury St. Edmunds (Mr. Griffiths) demanding that management should be consulted, but when will the workers be consulted? How are they to be consulted, and what are the criteria by which these powers are to be used?

Mr. Deputy Speaker: Order. It is a question whether Parliament should be consulted. I hope that the hon. Gentleman will get on to that point.

Mr. McNally: Absolutely, Mr. Deputy Speaker.
I hope that Parliament will be used as a means of consulting and justifying the action and the powers that we are about to transfer if we should lose this vote tonight. The real worry—I hope that it is one that will be kept before Parliament constantly; it is certainly the worry of my constituents—is that when these powers are used they will not be to the interest of the worker or of industry but will be Treasury directives, or promises made by the Secretary of State in a hard battle in the Cabinet, to fulfil another Tory manifesto commitment on taxes for the rich.
According to the chairman of the Post Office, the present policy involves the process of "leaning on". The Secretary of State declared that he would not intervene, and yet he is taking more powers than any other Secretary of State for Industry has taken in peacetime. He is amassing more power for himself over industry.
The amendment is designed to establish a minimum of parliamentary control against the fanaticism of the Secretary of State. It is a justifiable and reasonable amendment, and I hope that even those who are whipped and dragooned will see it as such tonight.

Mr. Ioan Evans: We are discussing a bad Bill and a bad clause. The amendment does not go far to improve the clause, but at least it gives us some parliamentary accountability. The Secretary of State talked about the great divide between the parties. The Government have an obsession that all our problems are the result of public ownership. The shipbuilding industry had 38 per cent. of the world's trade in 1950. It had declined to 4 per cent. in 1975. The Conservative Government were in power for 19 of those years. That decline was a failure for private enterprise.
One of British Leyland's biggest competitors is the Renault company, which is publicly owned. When there is a world recession, pushing back the frontiers of public ownership is irrelevant. The previous Government set up the National Enterprise Board and the Scottish and Welsh Development Agencies.

Mr. Deputy Speaker: Order. The hon. Member for Aberdare (Mr. Evans) is debating

a matter that has nothing to do with the amendment.

Mr. Evans: There was opposition to the setting up of the Welsh Development Agency and the NEB. However, Conservatives accept that the Scottish and Welsh Development Agencies and the NEB have a role to play. The Secretary of State for Wales made a statement in the House this week. He said that the Government planned to make available about £48 million in the next two years for remedial measures because of the catastrophe caused in Wales by Government policies. He said that a major part of the additional resources would go to the Welsh Development Agency.
In spite of the Government's mad obsession with expenditure cuts, they recognise that the Welsh Development Agency is the only organisation in Wales that can prevent the hopeless plight that could result from steel and coal industry closures.
If money is allocated to the Welsh Development Agency and the NEB intervenes to take over British Leyland and Rolls-Royce, private enterprise will have failed, as it did in the shipbuilding industry. British Leyland is to be transferred from the NEB to the Secretary of State's office. We are worried, because the Secretary of State says that the steel strike is none of his business. In the Bill, he seeks to intervene. If those industries are to be transferred to the Department of Industry, before the Secretary of State decides that Slater Walker or someone else is to take over British Leyland, or that it is to be sold to Honda or Renault, he should report to the House. He should report to the House before public assets that have been acquired—

Mr. Budgen: Mr. Budgen rose—

Mr. Evans: I will not give way, because I have been asked to finish quickly. We do not want to delay the proceedings on the Bill.
If these public assets, which have been acquired with public funds, are to be made more profitable, we must safeguard ourselves for the time when they become profitable. They may be sold to private enterprise because of the dogmatic land doctrinaire attitude of the Conservative Party. The Government are


quite willing that we should nationalise an industry that is not profitable, but once it becomes profitable they say that it must be handed back to the friends of the Conservatives. Because of the Government's obsession with rolling back the public sector, we say that our amendment should be carried by the House and that before the Secretary of State takes any action he should be accountable to Parliament.
If the Secretary of State intends to instruct the NEB to tell BL and the new micro-chip industries that the Government are to take them over so that they can be transferred to the financial backers of the Tory Party, the House must be able to keep a check on that, and the amendment, if carried, will go some way to achieving it.

Dr. John Cunningham: As the Government Benches seem to be rather uncertain why we have moved this amendment, let me try to spell it out. Clause 2 gives the NEB a new power to transfer to the Secretary of State shares and property, including the shares and property of its subsidiaries. The Secretary of State already has power under section 5 of the 1975 Act to transfer shares and property to the NEB.
Previous members of the board expressed the view that the absence of any power to enable it to make such transfers had never been a problem either in its operations or in its dealings with the previous Secretary of State and officials at the Department of Industry. Of course, it is this Government and this Secretary of State who are taking this power and no doubt requiring the NEB to make transfers from companies such as Rolls-Royce.
The clause is explicit about this new power for the NEB, subject to the Secretary of State's section 7 general and specific powers of direction. Otherwise I believe that there would be doubt about the ability of the Secretary of State to direct the NEB to transfer assets to him. If those circumstances and those powers are not important to Government Members, they are important to us.
The previous board was so concerned about these developments—as my hon. Friend the Member for Hamilton (Mr. Robertson) said—that it came into direct

conflict with the Secretary of State and subsequently resigned en masse. I re-emphasise that we are not talking about some raving, Left-wing members of the NEB, as was suggested earlier by the hon. Member for Southampton, Test (Mr. Hill). It was quite the reverse. The Secretary of State smiles and nods.
The members of the board were not willing to have their commercial judgment overridden by the Secretary of State for Industry, especially a Secretary of State who prides himself on not wanting to run industry, not knowing how to run industry and not wanting to have anything to do with intervention. The antithesis of all that he has said during his nine months in office is epitomised in the power contained in clause 2, to which the ex-members of the board, to a man, took such violent exception.

It is for those reasons, substantial reasons of considerable commercial and industrial policy importance, that we have tabled the amendment. We shall not be put off by the comment of the Under-Secretary of State for Scotland that the amendment is not, perhaps, as tightly worded as it might be. I concede that that may well be so, but that is peripheral to the issue before the House.

All the non-interventionists have now disappeared. The hon. Members for Surrey, North-West (Mr. Grylls), for Wolverhampton, South-West (Mr. Budgen) and others are no longer in their places. I have already referred to the hon. Member for Southampton, Test. I suppose that they are plucking up courage to go through the Lobby in support of something that must be anathema to them in reality, given their previous record on issues of this kind.

Also, the Secretary of State wants powers to direct the NEB to sell assets. We understand from the press, particularly the Financial Times of 19 and 21 December, that even that worm has now turned and that the present board, appointees to a man of the present Secretary of State, have themselves said that they are not willing to be dictated to, apparently, and that they are not willing to have their commercial judgment overridden.

Perhaps we shall discover in time that this sale of assets before the end of the


financial year will not take place. I hope that that will be so. It was being done for reasons of party dogma to do with the PSBR and it had nothing to do with good commercial judgment or good industrial management. The Secretary of State is as well aware of that as is anyone. Of course, this was another reason why we were unhappy to let the clause go through unamended.

My hon. Friend the Member for Keighley (Mr. Cryer) was quite right; we would prefer not to be discussing the Bill's provisions at all. But since we have to do that and, as realists, we are aware of the Government's majority in the House, the least of our responsibilities was to table an amendment of this kind to give the House the opportunity to discuss matters affected by these powers.

The situation will be that the Secretary of State will be able to substitute his judgment and that of his advisers for the commercial judgment of the NEB and its advisers. This must be the biggest contradiction in his whole position—and there are many contradictions in his position at present. It must be the biggest of all, coming from him, as it does, with all that he professes to believe about the need not to intervene. Indeed, in one of the debates that we had about the Rolls-Royce hiatus, the right hon. Gentleman and his hon. Friends said that a distinguished board such as the board of Rolls-Royce was not willing to be second-guessed by the NEB. He is now putting himself in exactly that position. He will be second-guessing the NEB itself in the situation in which he is likely to be when the Bill becomes an Act, as we suspect it will.

We are entitled to ask a number of questions about what will happen in these circumstances, because the guidelines and the statement of the Secretary of State leave a number of issues unclear.

Another reason why we have put forward the amendment is that the Secretary of State will have the power to direct the NEB to move assets, perhaps contrary to the wishes of the boards of companies, whether they are subsidiaries, wholly owned or partially owned by the NEB or the agencies, and, even worse, to force companies into partnerships, perhaps with organisations that they do not want to

join. That is a serious and strong power. It is a power that no merchant bank, city organisation or investment institution would tolerate for one moment if it were applied to them. Apparently, the Secretary of State intends that such power should be exercised in respect of taxpayers' assets by him and his advisers. Again, that is a massive contradiction of his position.

What are the contractual obligations that exist where the NEB has shareholdings? The Secretary of State has been remarkably reticent about those. Will they be overriden by his power? That is another question that the Government spokesmen have failed to answer. The point about the rights of workers was excellently made by my hon. Friend the Member for Stockport, South (Mr.McNally). In the previous clause we have seen the intention not to further industrial democracy. Are the workers in Ferranti, Fairey Aviation or Alfred Herbert—even British Leyland, since we heard so much about the vote on the Michael Edwardes' plan—to be consulted before there is a forced change of asset holders? Will the Secretary of State applaud that and agree with it? There are no guarantees for the workers in these industries.

It is significant that even directors of the companies—managing directors and their boards—have expressed the gravest possible doubts about the position, following the publication of the Bill and the refusal of the Government to accept any amendment to the provisions, in particular during the Committee stage.

The NEB is involved in a great many companies—between 12 and 60 wholly-owned and about 60 to 70 in which it has a partial interest. A great many workers—a large number of assets—are involved. To make matters worse, later tonight we shall be discussing new clause 1 and amendment 12, which are both long, involved, complex matters relating to clause 4. Again, that was unamended and will obviously also have great impact on asset control and ownership by the Secretary of State.

Although the Bill retains the present £3,000 million limit, as the Secretary of State compels NEB to reduce its assets and, therefore, its capital, more of the limit will be left in his hands for him to exercise. I should have thought that many Conservative Members would also be


concerned about the matter, because it is another massive seizing of power, giving room for manoeuvre for the noninterventionist Secretary of State. Not a peep has been heard about that. If the hon. Member for Surrey, North-West showed half as much concern for such matters as for decrying ideas simply because they emanate from Socialists or the Labour Party, we would think more of his intentions. All he seemed to do tonight was to repeat in several different ways the word "humbug", rather like Mr. Scrooge. He made no real contribution to the issues.

On commercial judgment, on any proper commercial practice, the powers

would be regarded as unacceptable. They brought about the resignation of a public board. In itself, that is unprecedented. Apparently they have already caused a difference of opinion between the Secretary of State and his appointees.

The House should accept the amendment so that Parliament, if no one else, may have the opportunity to debate such issues before a final decision is made.

Question put, That the amendment be made:—

The House divided: Ayes 235, Noes 292.

Division No. 157]
AYES
[10.40 pm


Abse, Leo
Dunn, James A. (Liverpool, Kirkdale)
Leadbitter, Ted


Adams, Allen
Dunwoody, Mrs. Gwyneth
Leighton, Ronald


Allaun, Frank
Eadie, Alex
Lestor, Miss Joan (Eton &amp; Slough)


Anderson, Donald
Eastham, Ken
Lewis, Ron (Carlisle)


Archer, Rt Hon Peter
Ellis, Raymond (NE Derbyshire)
Litherland, Robert


Armstrong, Rt Hon Ernest
Ellis, Tom (Wrexham)
Lofthouse, Geoffrey


Ashley, Rt Hon Jack
English, Michael
Lyons, Edward (Bradford West)


Ashton, Joe
Evans, Ioan (Aberdare)
McCartney, Hugh


Barnett, Guy (Greenwich)
Evans, John (Newton)
McDonald, Dr Oonagh


Barnett, Rt Hon Joel (Heywood)
Ewing, Harry
McElhone, Frank


Benn, Rt Hon Anthony Wedgwood
Field, Frank
McGuire, Michael (Ince)


Bennett, Andrew (Stockport N)
Flannery, Martin
McKelvey, William


Bidwell, Sydney
Fletcher, Ted (Darlington)
MacKenzie, Rt Hon Gregor


Booth, Rt Hon Albert
Foot, Rt Hon Michael
Maclennan, Robert


Boothroyd, Miss Betty
Ford, Ben
McMahon, Andrew


Bradford, Rev. R.
Forrester, John
McMillan, Tom (Glasgow, Central)


Bradley, Tom
Foster, Derek
McNally, Thomas


Bray, Dr Jeremy
Foulkes, George
McNamara, Kevin


Brown, Hugh D. (Provan)
Fraser, John (Lambeth, Norwood)
McWilliam, John


Brown, Robert C. (Newcastle W)
Freeson, Rt Hon Reginald
Magee, Bryan


Brown, Ronald W. (Hackney S)
Garrett, John (Norwich S)
Marks, Kenneth


Brown, Ron (Edinburgh, Leith)
Garrett, W. E. (Wallsend)
Marshall, David (Gl'sgow,Shettles'n)


Buchan, Norman
Ginsburg, David
Marshall, Dr Edmund (Goole)


Callaghan, Rt Hon J. (Cardiff SE)
Golding, John
Marshall, Jim (Leicester South)


Callaghan, Jim (Middleton &amp; P)
Gourlay, Harry
Martin, Michael (Gl'gow, Springb'rn)


Campbell, Ian
Grant, George (Morpeth)
Mason, Rt Hon Roy


Campbell-Savours, Dale
Grant, John (Islington C)
Maxton, John


Canavan, Dennis
Hamilton, James (Bothwell)
Maynard, Miss Joan


Cant, R. B.
Hamilton, W. W. (Central Fife)
Meacher, Michael


Carmichael, Neil
Hardy, Peter
Mellish, Rt Hon Robert


Carter-Jones, Lewis
Harrison, Rt Hon Walter
Mikardo, Ian


Clark, Dr David (South Shields)
Hart, Rt Hon Dame Judith
Millan, Rt Hon Bruce


Cocks, Rt Hon Michael (Bristol S)
Hattersley, Rt Hon Roy
Mitchell, Austin (Grimsby)


Cohen, Stanley
Haynes, Frank
Molyneaux, James


Coleman, Donald
Healey, Rt Hon Denis
Morris, Rt Hon Alfred (Wythenshawe)


Concannon, Rt Hon J. D.
Heffer, Eric S.
Morris, Rt Hon Charles (Openshaw)


Cook, Robin F.
Hogg, Norman (E Dunbartonshire)
Morris, Rt Hon John (Aberavon)


Craigen, J. M. (Glasgow, Maryhill)
Holland, Stuart (L'beth, Vauxhall)
Moyle, Rt Hon Roland


Crowther, J. S.
Home Robertson, John
Mulley, Rt Hon Frederick


Cryer, Bob
Horam, John
Newens, Stanley


Cunliffe, Lawrence
Howells, Geraint
Oakes, Rt Hon Gordon


Cunningham, George (Islington S)
Huckfield, Les
O'Halloran, Michael


Cunningham, Dr John (Whitehaven)
Hudson Davies, Gwilym Ednyfed
O'Neill, Martin


Dalyell, Tam
Hughes, Mark (Durham)
Orme, Rt Hon Stanley


Davidson, Arthur
Hughes, Robert (Aberdeen North)
Owen, Rt Hon Dr David


Davis, Clinton (Hackney Central)
Hughes, Roy (Newport)
Palmer, Arthur


Davis, Terry (B'rm'ham, Stechford)
Janner, Hon Greville
Park, George


Deakins, Eric
Jay, Rt Hon Douglas
Parker, John


Dean, Joseph (Leeds West)
John, Brynmor
Parry, Robert


Dempsey, James
Johnston, Russell (Inverness)
Pavitt, Laurie


Dewar, Donald
Jones, Rt Hon Alec (Rhondda)
Penhaligon, David


Dixon, Donald
Jones, Dan (Burnley)
Powell, Rt Hon J. Enoch (S Down)


Dobson, Frank
Kaufman, Rt Hon Gerald
Powell, Raymond (Ogmore)


Dormand, Jack
Kerr, Russell
Prescott, John


Douglas, Dick
Kilroy-Silk, Robert
Price, Christopher (Lewisham West)


Douglas-Mann, Bruce
Lambie, David
Race, Reg


Dubs, Alfred
Lamborn, Harry
Rees, Rt Hon Merlyn (Leeds South)


Duffy, A. E. P.
Lamond, James
Richardson, Jo




Roberts, Allan (Bootle)
Soley, Clive
Weetch, Ken


Roberts, Ernest (Hackney North)
Spearing, Nigel
Wellbeloved, James


Roberts, Gwilym (Cannock)
Spriggs, Leslie
Welsh, Michael


Robertson, George
Stallard, A. W.
White, Frank R. (Bury &amp; Radcliffe)


Rodgers, Rt Hon William
Steel, Rt Hon David
White, James (Glasgow, Pollock)


Rooker, J. W.
Stewart, Rt Hon Donald (W Isles)
Whitlock, William


Ross, Ernest (Dundee West)
Stoddart, David
Wigley, Dafydd


Ross, Stephen (Isle of Wight)
Stott, Roger
Willey, Rt Hon Frederick


Ross, Wm. (Londonderry)
Strang, Gavin
Williams, Rt Hon Alan (Swansea W)


Rowlands, Ted
Straw, Jack
Williams, Sir Thomas (Warrington)


Ryman, John
Taylor, Mrs Ann (Bolton West)
Wilson, Gordon (Dundee East)


Sandelson, Neville
Thomas, Jeffrey (Abertillery)
Wilson, Rt Hon Sir Harold (Huyton)


Sever, John
Thomas, Mike (Newcastle East)
Wilson, William (Coventry SE)


Sheerman, Barry
Thomas, Dr Roger (Carmarthen)
Winnick, David


Sheldon, Rt Hon Robert (A'ton-u-L)
Thorne, Stan (Preston South)
Woodall, Alec


Shore, Rt Hon Peter (Step and Pop)
Tilley, John
Woolmer, Kenneth


Short, Mrs. Renée
Tinn, James
Wrigglesworth, Ian


Silkin, Rt Hon John (Deptford)
Torney, Tom



Silkin, Rt Hon S. C. (Dulwich)
Varley, Rt Hon Eric G.
TELLERS FOR THE AYES


Silverman, Julius
Wainwright, Edwin (Dearne Valley)
Mr. Ted Graham and 


Smith, Cyril (Rochdale)
Walker, Rt Hon Harold (Doncaster)
 Mr. George Morton.


Smith, Rt Hon J. (North Lanarkshire)
Watkins, David





NOES


Adley, Robert
Costain, A. P.
Heseltine, Rt Hon Michael


Aitken, Jonathan
Cranborne, Viscount
Hicks, Robert


Alexander, Richard
Critchley, Julian
Higgins, Rt Hon Terence L.


Alison, Michael
Crouch, David
Hill, James


Amery, Rt Hon Julian
Dean, Paul (North Somerset)
Hogg, Hon Douglas (Grantham)


Ancram, Michael
Dickens, Geoffrey
Holland, Philip (Carlton)


Arnold, Tom
Dorrell, Stephen
Hooson, Tom


Aspinwall, Jack
Dover, Denshore
Hordern, Peter


Atkins, Rt Hon H. (Spelthorne)
du Cann, Rt Hon Edward
Howe, Rt Hon Sir Geoffrey


Atkins, Robert (Preston North)
Dunn, Robert (Dartford)
Howell, Rt Hon David (Guildford)


Atkinson, David (B'mouth, East)
Durant, Tony
Howell, Ralph (North Norfolk)


Baker, Kenneth (St. Marylebone)
Eden, Rt Hon Sir John
Hunt, David (Wirral)


Baker, Nicholas (North Dorset)
Edwards, Rt Hon N. (Pembroke)
Hunt, John (Ravensbourne)


Beaumont-Dark, Anthony
Eggar, Timothy
Hurd, Hon Douglas


Bell, Sir Ronald
Elliott, Sir William
Irving, Charles (Cheltenham)


Bendall, Vivian
Emery, Peter
Jenkin, Rt Hon Patrick


Benyon, Thomas (Abingdon)
Eyre, Reginald
Jessel, Toby


Benyon, W. (Buckingham)
Fairgrieve, Russell
Johnson Smith, Geoffrey


Berry, Hon Anthony
Faith, Mrs Sheila
Jopling, Rt Hon Michael


Best, Keith
Farr, John
Joseph, Rt Hon Sir Keith


Bevan, David Gilroy
Fell, Anthony
Kaberry, Sir Donald


Biffen, Rt Hon John
Fenner, Mrs Peggy
Kellett-Bowman, Mrs Elaine


Biggs-Davison, John
Finsberg, Geoffrey
Kershaw, Anthony


Blackburn, John
Fisher, Sir Nigel
Kimball, Marcus


Blaker, Peter
Fletcher, Alexander (Edinburgh N)
King, Rt Hon Tom


Body, Richard
Fletcher-Cooke, Charles
Knight, Mrs Jill


Bonsor, Sir Nicholas
Fookes, Miss Janet
Knox, David


Boscawen, Hon Robert
Forman, Nigel
Lang, Ian


Bottomley, Peter (Woolwich West)
Fowler, Rt Hon Norman
Latham, Michael


Bowden, Andrew
Fox, Marcus
Lawrence, Ivan


Boyson, Dr Rhodes
Fraser, Rt Hon H. (Stafford &amp; St)
Lawson, Nigel


Bright, Graham
Fraser, Peter (South Angus)
Lee, John


Brinton, Tim
Fry, Peter
Le Marchant, Spencer


Brittan, Leon
Galbraith, Hon T. G. D.
Lennox-Boyd, Hon Mark


Brocklebank-Fowler, Christopher
Gardiner George (Reigate)
Lewis, Kenneth (Rutland)


Brooke, Hon Peter
Gardner, Edward (South Fylde)
Lloyd, Ian (Havant &amp; Waterloo)


Brotherton, Michael
Garel-Jones, Tristan
Lloyd, Peter (Fareham)


Brown, Michael (Brigg &amp; Sc'thorpe)
Gilmour, Rt Hon Sir Ian
Loveridge, John


Browne, John (Winchester)
Glyn, Dr Alan
Luce, Richard


Bruce-Gardyne, John
Gorst, John
Lyell, Nicholas


Bryan, Sir Paul
Gow, Ian
Macfarlane, Neil


Buchanan-Smith, Hon Alick
Gower, Sir Raymond
MacGregor, John


Budgen, Nick
Greenway, Harry
MacKay, John (Argyll)


Bulmer, Esmond
Grieve, Percy
McNair-Wilson, Michael (Newbury)


Burden, F. A.
Griffiths, Eldon (Bury St Edmunds)
McNair-Wilson, Patrick (New Forest)


Butcher, John
Griffiths, Peter (Portsmouth N)
McQuarrie, Albert


Butler, Hon Adam
Grist, Ian
Madel, David


Cadbury, Jocelyn
Grylls, Michael
Major, John


Carlisle, John (Luton West)
Gummer, John Selwyn
Marland, Paul


Carlisle, Kenneth (Lincoln)
Hamilton, Hon Archie (Eps'm&amp;Ew'll)
Marlow, Antony


Carlisle, Rt Hon Mark (Runcorn)
Hamilton, Michael (Salisbury)
Marshall, Michael (Arundel)


Chalker, Mrs. Lynda
Hampson, Dr Keith
Marten, Neil (Banbury)


Channon, Paul
Hannam, John
Maude, Rt Hon Angus


Clark, Sir William (Croydon South)
Haselhurst, Alan
Mawby, Ray


Clarke, Kenneth (Rushcliffe)
Hastings, Stephen
Mawhinney, Dr Brian


Cockeram, Eric
Havers, Rt Hon Sir Michael
Maxwell-Hyslop, Robin


Colvin, Michael
Hawksley, Warren
Mayhew, Patrick


Cope, John
Hayhoe, Barney
Mellor, David


Cormack, Patrick
Heddle, John
Meyer, Sir Anthony


Corrie, John
Henderson, Barry
Miller, Hal (Bromsgrove &amp; Redditch)







Mills, Iain (Meriden)
Rees-Davies, W. R.
Tebbit, Norman


Mills, Peter (West Devon)
Renton, Tim
Temple-Morris, Peter


Miscampbell, Norman
Rhodes James, Robert
Thompson, Donald


Mitchell, David (Basingstoke)
Rhys Williams, Sir Brandon
Thorne, Neil (Ilford South)


Moate, Roger
Ridley, Hon Nicholas
Thornton, Malcolm


Montgomery, Fergus
Rifkind, Malcolm
Townend, John (Bridlington)


Moore, John
Roberts, Wyn (Conway)
Townsend, Cyril D. (Bexleyheath)


Morgan, Geraint
Rossi, Hugh
Trippier, David


Morris, Michael (Northampton, Sth)
Rost, Peter
Trotter, Neville


Morrison, Hon Peter (City of Chester)
Royle, Sir Anthony
van Straubenzee, W. R.


Mudd, David
Sainsbury, Hon Timothy
Viggers, Peter


Murphy, Christopher
Scott, Nicholas
Waddington, David


Myles, David
Shaw, Giles (Pudsey)
Wakeham, John


Neale, Gerrard
Shaw, Michael (Scarborough)
Waldegrave, Hon William


Needham, Richard
Shelton, William (Streatham)
Walker, Rt Hon Peter (Worcester)


Nelson, Anthony
Shepherd, Colin (Hereford)
Walker, Bill (Perth &amp; E Perthshire)


Neubert, Michael
Shepherd, Richard (Aldridge-Br'hills)
Wall, Patrick


Newton, Tony
Shersby, Michael
Waller, Gary


Normanton, Tom
Silvester, Fred
Walters, Dennis


Nott, Rt Hon John
Sims, Roger
Ward, John


Osborn, John
Skeet, T. H. H.
Warren, Kenneth


Page, John (Harrow, West)
Smith, Dudley (War. and Leam'ton)
Watson, John


Page, Rt Hon Sir R. Graham
Speller, Tony
Wells, John (Maidstone)


Page, Richard (SW Hertfordshire)
Spence, John
Wells, Bowen (Hert'rd &amp; Stev'nage)


Parris, Matthew
Spicer, Jim (West Dorset)
Wheeler, John


Patten, Christopher (Bath)
Spicer, Michael (S Worcestershire)
Whitelaw, Rt Hon William


Patten, John (Oxford)
Sproat, Iain
Whitney, Raymond


Pawsey, James
Squire, Robin
Wickenden, Keith


Percival, Sir Ian
Stainton, Keith
Wiggin, Jerry


Pink, R. Bonner
Stanbrook, Ivor
Williams, Delwyn (Montgomery)


Pollock, Alexander
Stanley, John
Winterton, Nicholas


Porter, George
Steen, Anthony
Wolfson, Mark


Prentice, Rt Hon Reg
Stevens, Martin
Young, Sir George (Acton)


Price, David (Eastleigh)
Stewart, Ian (Hitchin)
Younger, Rt Hon George


Proctor, K. Harvey
Stewart, John (East Renfrewshire)



Pym, Rt Hon Francis
Stokes, John
TELLERS FOR THE NOES:


Raison, Timothy
Stradling Thomas, J.
Mr. Carol Mather and 


Rathbone, Tim
Tapsell, Peter
Lord James Douglas-Hamilton.


Rees, Peter (Dover and Deal)
Taylor, Robert (Croydon NW)

Question accordingly negatived.

Clause 3

PUBLIC DIVIDEND CAPITAL

Dr. John Cunningham: I beg to move amendment No. 9, in page 3, leave out lines 16 to 42.
I shall be brief, as usual. Clause 3 gives the NEB the power to pass to the Secretary of State, with a consequential reduction of its capital, the proceeds of disposals that could be directed by the Secretary of State.
The way in which the clause is drafted leaves open the possibility, which the Secretary of State mentioned, that the NEB will retain some of the proceeds of its disposals for reinvestment. Without the clause, the NEB would have no power to remit the proceeds of disposals to the Government, and the much-publicised but now doubtful raising of £100 million as a contribution to the reduction of the public sector borrowing requirement would not be possible.

We are opposed to the disposal of public assets in that way. No sound commercial judgment is in evidence for insisting on the disposal.

Mr. David Mitchell: The purpose of the clause is to put into effect the matters that were debated at some length on amendment No. 8. Therefore, I can be as brief as the hon. Member for White-haven (Dr. Cunningham).
As the amendment is consequential, it follows automatically that the Government feel that they should have the machinery by which they can transfer the public dividend capital by reduction and enable it to parallel the reduction in assets and money transferred to the Treasury with the reduction in the nominal public dividend capital. For that reason, we are unable to accept the amendment.

Question put, That the amendment be made:—

The House divided: Ayes 225, Noes 302.

Division No. 158]
AYES
[10.55 pm


Abse, Leo
Archer, Rt Hon Peter
Barnett, Guy (Greenwich)


Adams, Allen
Armstrong, Rt Hon Ernest
Barnett, Rt Hon Joel (Heywood)


Allaun, Frank
Ashley, Rt Hon Jack
Benn, Rt Hon Anthony Wedgwood


Anderson, Donald
Ashton, Joe
Bennett, Andrew (Stockport N)




Bidwell, Sydney
Grant, John (Islington C)
Owen, Rt Hon Dr David


Booth, Rt Hon Albert
Hamilton, W. W. (Central Fife)
Palmer, Arthur


Boothroyd, Miss Betty
Hardy, Peter
Park, George


Bradley, Tom
Harrison, Rt Hon Walter
Parry, Robert


Bray, Dr Jeremy
Hart, Rt Hon Dame Judith
Pavitt, Laurie


Brown, Hugh D. (Provan)
Hattersley, Rt Hon Roy
Powell, Raymond (Ogmore)


Brown, Robert C. (Newcastle W)
Haynes, Frank
Prescott, John


Brown, Ronald W. (Hackney S)
Healey, Rt Hon Denis
Price, Christopher (Lewisham West)


Brown, Ron (Edinburgh, Leith)
Heffer, Eric S.
Race, Reg


Buchan, Norman
Hogg, Norman (E Dunbartonshire)
Rees, Rt Hon Merlyn (Leeds South)


Callaghan, Rt Hon J. (Cardiff SE)
Holland, Stuart (L'beth, Vauxhall)
Richardson, Jo


Callaghan, Jim (Middleton &amp; P)
Home Robertson, John
Roberts, Allan (Bootle)


Campbell, Ian
Horam, John
Roberts, Ernest (Hackney North)


Campbell-Savours, Dale
Huckfield, Les
Roberts, Gwilym (Cannock)


Canavan, Dennis
Hudson Davies, Gwilym Ednyfed
Robertson, George


Cant, R. B.
Hughes, Mark (Durham)
Rodgers, Rt Hon William


Carmichael, Neil
Hughes, Robert (Aberdeen North)
Rooker, J. W.


Carter-Jones, Lewis
Hughes, Roy (Newport)
Ross, Ernest (Dundee West)


Clark, Dr David (South Shields)
Janner, Hon Greville
Rowlands, Ted


Cocks, Rt Hon Michael (Bristol S)
Jay, Rt Hon Douglas
Ryman, John


Cohen, Stanley
John, Brynmor
Sandelson, Neville


Coleman, Donald
Jones, Rt Hon Alec (Rhondda)
Sever, John


Concannon, Rt Hon J. D.
Jones, Barry (East Flint)
Sheerman, Barry


Cook, Robin F.
Jones, Dan (Burnley)
Sheldon, Rt Hon Robert (A'ton-u-L)


Craigen, J. M. (Glasgow, Maryhill)
Kaufman, Rt Hon Gerald
Shore, Rt Hon Peter (Step and Pop)


Crowther, J. S.
Kerr, Russell
Short, Mrs. Ranée


Cryer, Bob
Kilroy-Silk, Robert
Silkin, Rt Hon John (Deptford)


Cunliffe, Lawrence
Lambie, David
Silkin, Rt Hon S. C. (Dulwich)


Cunningham, George (Islington S)
Lamborn, Harry
Silverman, Julius


Cunningham, Dr John (Whitehaven)
Lamond, James
Smith, Rt Hon J. (North Lanarkshire)


Dalyell, Tam
Leadbitter, Ted
Soley, Clive


Davidson, Arthur
Leighton, Ronald
Spearing, Nigel


Davies, Rt Hon Denzil (Llanelli)
Lestor, Miss Joan (Eton &amp; Slough)
Spriggs, Leslie


Davis, Clinton (Hackney Central)
Lewis, Ron (Carlisle)
Stallard, A. W.


Davis, Terry (B'rm'ham, Stechford)
Litherland, Robert
Stewart, Rt Hon Donald (W Isles)


Deakins, Eric
Lofthouse, Geoffrey
Stoddart, David


Dean, Joseph (Leeds West)
Lyons, Edward (Bradford West)
Stott, Roger


Dempsey, James
McDonald, Dr Oonagh
Strang, Gavin


Dewar, Donald
McElhone, Frank
Straw, Jack


Dixon, Donald
McGuire, Michael (Ince)
Taylor, Mrs Ann (Bolton West)


Dobson, Frank
McKelvey, William
Thomas, Jeffrey (Abertillery)


Dormand, Jack
MacKenzie, Rt Hon Gregor
Thomas, Mike (Newcastle East)


Douglas, Dick
Maclennan, Robert
Thomas, Dr Roger (Carmarthen)


Douglas-Mann, Bruce 
McMahon, Andrew 
Thorne, Stan (Preston South) 


Dubs, Alfred
McMillan, Tom (Glasgow, Central)
Tilley, John


Duffy, A. E. P.
McNally, Thomas
Tinn, James


Dunn, James A. (Liverpool, Kirkdale)
McNamara, Kevin
Torney, Tom


Dunwoody, Mrs. Gwyneth
McWilliam, John
Varley, Rt Hon Eric G.


Eadie, Alex
Magee, Bryan
Wainwright, Edwin (Dearne Valley)


Eastham, Ken
Marks, Kenneth
Walker, Rt Hon Harold (Doncaster)


Ellis, Raymond (NE Derbyshire)
Marshall, David (Gl'sgow, Shettles'n)
Watkins, David


Ellis, Tom (Wrexham)
Marshall, Dr Edmund (Goole)
Weetch, Ken


English, Michael
Marshall, Jim (Leicester South)
Wellbeloved, James


Evans, loan (Aberdare)
Martin, Michael (Gl'gow, Springb'rn)
Welsh, Michael


Evans, John (Newton)
Mason, Rt Hon Roy
White, Frank R. (Bury &amp; Radcliffe)


Ewing, Harry
Maxton, John
White, James (Glasgow, Pollock)


Field, Frank
Maynard, Miss Joan
Whitlock, William


Flannery, Martin 
Meacher, Michael 
Wigley, Dafydd


Fletcher, Ted (Darlington)
Mellish, Rt Hon Robert
Willey, Rt Hon Frederick


Foot, Rt Hon Michael
Mikardo, Ian
Williams, Rt Hon Alan (Swansea W)


Ford, Ben 
Millan, Rt Hon Bruce
Wilson, Gordon (Dundee East)


Forrester, John
Mitchell, Austin (Grimsby)
Wilson, Rt Hon Sir Harold (Huyton)


Foster, Derek
Morris, Rt Hon Alfred (Wythenshawe)
Wilson, William (Coventry SE)


Foulkes, George
Morris, Rt Hon Charles (Openshaw)
Winnick, David


Fraser, John (Lambeth, Norwood)
Morris, Rt Hon John (Aberavon)
Woodall, Alec


Freeson, Rt Hon Reginald 
Morton, George
Woolmer, Kenneth


Garrett, John (Norwich S)
Moyle, Rt Hon Roland



Garrett, W. E. (Wallsend)
Mulley, Rt Hon Frederick
Wrigglesworth, Ian


Ginsburg, David
Newens, Stanley



Golding, John
Oakes, Rt Hon Gordon
TELLERS FOR THE AYES:


Gourlay, Harry
O'Halloran, Michael
Mr. James Hamilton and 


Graham, Ted
O'Neill, Martin
 Mr. Hugh McCartney 


Grant, George (Morpeth)
Orme, Rt Hon Stanley





NOES


Adley, Robert
Atkinson, David (B'mouth, East)
Biffen, Rt Hon John


Aitken, Jonathan
Baker, Kenneth (St. Marylebone)
Biggs-Davison, John


Alexander, Richard
Baker, Nicholas (North Dorset)
Blackburn, John


Alison, Michael
Beaumont-Dark, Anthony
Blaker, Peter


Amery, Rt Hon Julian
Bell, Sir Ronald
Body, Richard


Ancram, Michael
Bendall, Vivian
Bonsor, Sir Nicholas


Arnold, Tom
Benyon, Thomas (Abingdon)
Boscawen, Hon Robert


Aspinwall, Jack
Benyon, W. (Buckingham)
Bottomley, Peter (Woolwich West)


Atkins, Rt Hon H. (Spelthorne)
Bevan, David Gilroy
Bowden, Andrew


Atkins, Robert (Preston North)
Best, Keith
Boyson, Dr Rhodes







Bradford, Rev. R.
Hastings, Stephen
Newton, Tony


Bright, Graham
Havers, Rt Hon Sir Michael
Normanton, Tom


Brinton, Tim
Hawksley, Warren
Nott, Rt Hon John


Brittan, Leon
Hayhoe, Barney
Osborn, John


Brocklebank-Fowler, Christopher
Heddle, John
Page, John (Harrow, West)


Brooke, Hon Peter
Henderson, Barry
Page, Rt Hon Sir R. Graham


Brotherton, Michael
Heseltine, Rt Hon Michael
Page, Richard (SW Hertfordshire)


Brown, Michael (Brigg &amp; Sc'thorpe)
Hicks, Robert
Parris, Matthew


Browne, John (Winchester)
Higgins, Rt Kon Terence L.
Patten, Christopher (Bath)


Bruce-Gardyne, John
Hill, James
Patten, John (Oxford)


Bryan, Sir Paul
Hogg, Hon Douglas (Grantham)
Pawsey, James


Buchanan-Smith, Hon Alick
Holland, Philip (Carlton)
Penhaligon, David


Budgen, Nick
Hooson, Tom
Percival, Sir Ian


Bulmer, Esmond
Hordern, Peter
Pink, R. Bonner


Burden, F. A.
Howe, Rt Hon Sir Geoffrey
Pollock, Alexander


Butcher, John
Howell, Rt Hon David (Guildford)
Porter, George


Butler, Hon Adam
Howell, Ralph (North Norfolk)
Powell, Rt Hon J. Enoch (S Down)


Cadbury, Jocelyn
Howells, Geraint
Price, David (Eastleigh)


Carlisle, John (Luton West)
Hunt, David (Wirral)
Proctor, K. Harvey


Carlisle, Kenneth (Lincoln)
Hunt, John (Ravensbourne)
Pym, Rt Hon Francis


Carlisle, Rt Hon Mark (Runcorn)
Hurd, Hon Douglas
Raison, Timothy


Chalker, Mrs. Lynda
Irving, Charles (Cheltenham)
Rathbone, Tim


Channon, Paul
Jenkin, Rt Hon Patrick
Rees, Peter (Dover and Deal)


Clark, Hon Alan (Plymouth, Sutton)
Jessel, Toby
Rees-Davies, W. R.


Clark, Sir William (Croydon South)
Johnson Smith, Geoffrey
Renton, Tim


Clarke, Kenneth (Rushcliffe)
Johnston, Russell (Inverness)
Rhodes James, Robert


Cockeram, Eric
Jopling, Rt Hon Michael
Rhys Williams, Sir Brandon


Colvin, Michael
Joseph, Rt Hon Sir Keith
Ridley, Hon Nicholas


Cope, John
Kaberry, Sir Donald
Rifkind, Malcolm


Cormack, Patrick
Kellett-Bowman, Mrs Elaine
Roberts, Wyn (Conway)


Corrie, John
Kershaw, Anthony
Ross, Stephen (Isle of Wight)


Costain, A. P.
Kimball, Marcus
Ross, Wm. (Londonderry)


Cranborne, Viscount
King, Rt Hon Tom
Rossi, Hugh


Critchley, Julian
Knight, Mrs Jill
Rost, Peter


Crouch, David
Knox, David
Royle, Sir Anthony


Dean, Paul (North Somerset)
Lang, Ian
Sainsbury, Hon Timothy


Dickens, Geoffrey
Latham, Michael
St. John-Stevas, Rt Hon Norman


Dorrell, Stephen
Lawrence, Ivan
Scott, Nicholas


Douglas-Hamilton, Lord James
Lawson, Nigel
Shaw, Giles (Pudsey)


Dover, Denshore
Lee, John
Shaw, Michael (Scarborough)


du Cann, Rt Hon Edward
Le Merchant, Spencer
Shelton, William (Streatham)


Dunn, Robert (Dartford)
Lennox-Boyd, Hon Mark
Shepherd, Colin (Hereford)


Durant, Tony
Lewis, Kenneth (Rutland)
Shepherd, Richard(Aldridge-Br'hills)


Eden, Rt Hon Sir John
Lloyd, Ian (Havant &amp; Waterloo)
Shersby, Michael


Edwards, Rt Hon N. (Pembroke)
Lloyd, Peter (Fareham)
Silvester, Fred


Eggar, Timothy
Loveridge, John
Sims, Roger


Elliott, Sir William
Luce, Richard
Skeet, T. H. H.


Emery, Peter
Lyell, Nicholas
Smith, Cyril (Rochdale)


Eyre, Reginald
Macfarlane, Neil
Smith, Dudley (War. and Leam'ton)


Fairgrieve, Russell
MacGregor, John
Speller, Tony


Faith, Mrs Sheila
MacKay, John (Argyll)
Spence, John


Farr, John
McNair-Wilson, Michael (Newbury)
Spicer, Jim (West Dorset)


Fell, Anthony
McNair-Wilson, Patrick (New Forest)
Spicer, Michael (S Worcestershire)


Fenner, Mrs Peggy
McQuarrie, Albert
Sproat, Iain


Finsberg, Geoffrey
Madel, David
Squire, Robin


Fisher, Sir Nigel
Major, John
Stainton, Keith


Fletcher, Alexander (Edinburgh N)
Marland, Paul
Stanbrook, Ivor


Fletcher-Cooke, Charles
Marlow, Antony
Stanley, John


Fookes, Miss Janet
Marshall, Michael (Arundel)
Steel, Rt Hon David


Forman, Nigel
Marten, Neil (Banbury)
Steen, Anthony


Fowler, Rt Hon Norman
Maude, Rt Hon Angus
Stevens, Martin


Fox, Marcus
Mawby, Ray
Stewart, Ian (Hitchin)


Fraser, Rt Hon H. (Stafford &amp; St)
Mawhinney, Dr Brian
Stewart, John (East Renfrewshire)


Fraser, Peter (South Angus)
Maxwell-Hyslop, Robin
Stokes, John


Fry, Peter
Mayhew, Patrick
Stradling Thomas, J.


Galbraith, Hon T. G. D.
Mellor, David
Tapsell, Peter


Gardiner George (Reigate)
Meyer, Sir Anthony
Taylor, Robert (Croydon NW)


Gardner, Edward (South Fylde)
Miller, Hal (Bromsgrove &amp; Redditch)
Tebbit, Norman


Garel-Jones, Tristan
Mills, Iain (Meriden)
Temple-Morris, Peter


Gilmour, Rt Hon Sir Ian
Mills, Peter (West Devon)
Thompson, Donald


Glyn, Dr Alan
Miscampbell, Norman
Thorne, Neil (Ilford South)


Gorst, John
Mitchell, David (Basingstoke)
Thornton, Malcolm


Gow, Ian
Moate, Roger
Townend, John (Bridlington)


Gower, Sir Raymond
Molyneaux, James
Townsend, Cyril D. (Bexleyheath)


Greenway, Harry
Montgomery, Fergus
Trippier, David


Grieve, Percy
Moore, John
Trotter, Neville


Griffiths, Eldon (Bury St Edmunds)
Morgan, Geraint
van Straubenzee, W. R.


Griffiths, Peter (Portsmouth N)
Morris, Michael (Northampton, Sth)
Viggers, Peter


Grist, Ian
Morrison, Hon Peter (City of Chester)
Waddington, David


Grylls, Michael
Mudd, David
Wakeham, John


Gummer, John Selwyn
Murphy, Christopher
Waldegrove, Hon William


Hamilton, Hon Archie (Eps'm&amp;Ew'll)
Myles, David
Walker, Rt Hon Peter (Worcester)


Hamilton, Michael (Salisbury)
Neale, Gerrard
Walker, Bill (Perth &amp; E Perthshire)


Hampson, Dr Keith
Needham, Richard
Wall, Patrick


Hannam, John
Nelson, Anthony
Waller, Gary


Haselhurst, Alan
Neubert, Michael
Walters, Dennis







Ward, John
Whitney, Raymond
Young, Sir George (Acton)


Warren, Kenneth
Wickenden, Keith
Younger, Rt Hon George


Watson, John
Wiggin Jerry



Wells, John (Maidstone)
Williams, Delwyn (Montgomery)
TELLERS FOR THE NOES:


Wheeler, John
Winterton, Nicholas
Mr. Anthony Berry and Mr. Carol Mather


Whitelaw, Rt Hon William
Wolfson, Mark

Question accordingly negatived

Clause 4

FINANCIAL LIMITS

Mr. Wigley: I beg to move amendment No. 10, in page 3, line 44 leave out from 'and' to '(which' in page 4, line 1.

Mr. Deputy Speaker (Mr. Bernard Weatherill): With this we may take amendment No. 11, in page 4, line 4, leave out 'and Welsh Development Agencies' and insert Development Agency'.

Mr. Wigley: These amendments go to the central part of the Bill at a particularly timely moment. The objective of the Bill is to amend the Welsh Development Agency Act in such a way as to eliminate the availability of an additional £150 million by order of the Secretary of State with the Treasury's consent. I accept that similar provisions are being made in respect of the National Enterprise Board, through the Industry Act amendment, and the Scottish Development Agency, through the Scottish Development Agency Act amendment, which come forward in the same clause.
The argument in relation to the Welsh Development Agency is particularly timely because of the crisis—I choose my word carefully—that is now facing industry in Wales. It is such a crisis that we had the unprecedented development on Monday night of the annual Welsh debate being subject to a three-line Whip. That was quite right in view of the cataclysmic effect on employment in Wales of developments in industry.
Steel closures in Wales are precipitating the direct loss of around 15,000 jobs. Associated with those steel closures is the possible loss of up to 22 of the 36 or 37 coal mines at present operating in Wales. That will involve the loss of another 15,000 jobs. Together with this loss of 30,000 jobs in coal and steel, inevitably there will be associated job losses in engineering, transport and the other service industries. Around 50,000 jobs will be lost in Wales, which will increase the unemployment level from the present

near-100,000 figure to around 150,000. It is salutary to remember that the unemployment level in Wales in 1928, at the beginning of the depression, was 154,000. In other words, we are now seeing the development of chronic unemployment in Wales on a parallel to the tragedy that we experienced in the years between the two world wars.

In such circumstances, I do not think that any hon. Member would disagree that there is a need for intervention. If there is no intervention, and if there is no positive stimulus to try to encourage job opportunities in Wales, not only will industries collapse; whole communities that are dependent upon them will collapse—communities in the valleys of North and North-East Wales, communities around Shotton steelworks and in the Wrexham coalfield area. It will spread to my county of Gwynedd and to Dyfed, which are to a large extent dependent upon those industries. In the absence of those industries and the focus on the coal and steel areas for attracting new jobs, it will be virtually impossible to attract new jobs to Gwynedd and Dyfed because of the focus on the eastern parts of Wales.

There is a real crisis in employment—a crisis, to be fair, that the Secretary of State has recognised. In the context of Shotton, there has been an allocation of an additional £15 million to help to develop job opportunities in that area. That money is desperately needed. Much more than £15 million is needed if we are to create the jobs that are needed in Shotton and Clwyd.

But if we consider not only the closures at Shotton and Clwyd but the closures in Glamorgan, Gwent and South-East Dyfed, we are talking about a much larger figure. I acknowledge that the Welsh Office has taken an initiative in this direction by adding £48 million to the budget of the Welsh Development Agency to help such areas.

If there is logic in adding £15 million to WDA's expenditure because of the closures in Shotton, and if there is a need to add £48 million because of the crisis


in the coal and steel industries in Glamorgan and Gwent, it is crazy to cut away the £150 million expenditure provision that was provided under section 18 of the Welsh Development Agency Act 1975. Whatever the merits or demerits of that £150 million provision in the original Act, and whatever the merits or demerits of upping the figures, as was done in the Industry Act 1979, there can now be no argument that, given the crisis that we face in Wales, we need every provision at our disposal in order to respond to it.

We do not know the size of the domino effect that we will suffer in Wales. We know that when manufacturing industries close, not only the direct industries, or even the spin-off industries, such as engineering or transport, will suffer. Shops, pubs, hotels—everything in the economy—will be in danger.

Such uncertainty, which is disturbing a tremendous number of people in Wales, was the background to the massive demonstration in Cardiff a fortnight ago. In such circumstances, it is criminal to take away the extra provision that has already been statutorily provided by the Welsh Development Agency Act.

Whatever the arguments in relation to the NEB and to the Scottish Development Agency—I accept that there may be similar arguments in those directions—in the case of Wales, given the crisis that we are facing, we should not cut that provision.

Sir Anthony Meyer: The hon. Member for Caernarvon (Mr. Wigley) made a good case, though I am sure that he would be the first to admit that even if the amendment were accepted and the Secretary of State retained the power to increase the borrowing limits of the WDA, it would not make the slightest difference in present circumstances.
However, in view of the atmosphere in Wales, it is a pity that the impression should be given that the clause is creating obstacles to the raising of the limits should the necessity arise.
Even my hon. Friend the Under-Secretary of State for Industry, who led in Committee with such superlative skill—I have never served on a Committee that was better led by a junior Minister—failed to convince me on this matter, and I abstained in the Division. Perhaps my right hon. Friend the Secretary of State

for Wales will be more convincing. I shall wait and see.

Mr. Tom Ellis: I congratulate the hon. Member for Caernarvon (Mr. Wigley) on tabling the amendment. It may appear invidious to single out Wales from Scotland and the development areas of England, but we have a valid case.
I was delighted to hear the hon. Gentleman say that in the Welsh affairs debate on Monday "we" were on a three-line Whip. I am not sure whether he was referring to Plaid Cymru or to the Labour Party, but I am glad that he is identifying himself with the Labour Party, because that reflects the policies being pursued by the Government.
Some of us gave the House some facts and figures in Monday's debate and I should like to draw attention to the startling fact that in 1975 there were 15 per cent. fewer men in employment in Wales than in 1965. The position has worsened since then, and the figure must be nearing 20 per cent. That is a measure of the seriousness of the situation facing Wales even before the developments that are likely to occur over the next year or two.
There are reasons for such figures. They are connected with our historical development and the fact that the coal, slate and steel industries went where the deposits were. Now that that sort of mineral-deposit location of industry no longer has the same force, the original trends to the South-East are reasserting themselves and have reached such desperate proportions in Wales that some of us feel that in many ways, not directly concerned with industry, serious consequences are resulting.
For example, it is well known that the Welsh figures for children leaving school with qualifications, whether GCE, CSE or whatever, are appreciably worse than those in any other area. There have been arguments whether the education system in Wales is as good as that elsewhere, but some of us who have studied the matter seriously feel that perhaps a long period of emigration of some of our most talented young people is resulting in Wales being left with an inherently lower native talent. That may appear fanciful, but some of us think that there are grounds for believing that it may be so.
The Secretary of State for Wales has announced substantial increases in assistance as a crisis measure, and I am grateful for them, but that is not the same as having built in, as a part of permanent Government policy, a recognition of the desperately serious position in Wales, which is relatively worse than in any other part of the United Kingdom.

Mr. Budgen: I hope that the House will agree that in debates about a particular part of the United Kingdom there is some danger in concentrating on the problems of that area. We put forward proposals that may be superficially advantageous to that area but may disadvantage, and even damage, other areas.
The Secretary of State for Industry frequently speaks of the damage done to the taxpayer generally. I want to speak of the effect of regional policies on those areas that border upon Wales, such as the once prosperous areas of Wolverhampton and the Black Country. Wolverhampton is now properly described as a depressed area and, as my right hon. Friend has often said, it has been severely damaged by regional policies, of which the Welsh Development Agency is a significant part.
I am bound to disagree with the way in which my hon. Friend the Member for Flint, West (Sir A. Meyer) puts his argument. In the short term it may be to the advantage of the people of Wales if the borrowing limits of the Welsh Development Agency are made more generous. What is to their short-term advantage is almost certainly to the long term disadvantage of stricken areas such as Wolverhampton. Therefore, on this occasion I am pleased to support the more stringent measures put forward by my right hon. Friend.

The Secretary of State for Wales (Mr. Nicholas Edwards): The hon. Member for Caernarvon (Mr. Wigley) and the hon. Member for Wrexham (Mr. Ellis) spoke about the serious situation that we face as a result of steel and coal closures in South Wales. I would not accept all the figures and all the estimates they referred to, nor would I necessarily draw the same conclusions as those of the hon. Member for Wrexham.
I would be the last to underestimate the serious impact of these developments

in South Wales, and I did not seek to do so in the debate on Monday. However, we are not debating the immediate financial provisions to meet the situation or, indeed, what money will be made available from year to year under the Government's unfolding expenditure plans.
The proper place to reach that decision is when the time comes to discuss the financial Estimates. We are debating the control exercised by the House of Commons. That is the central point. The hon. Gentleman spoke of uncertainty and my hon. Friend spoke of the atmosphere in Wales and of not placing unnecessary obstacles in the way of dealing with the situation.
I am not seeking, nor are the Government seeking, to place obstacles. The statements that I have made about Shotton and about the financial provision for closures at Llanwern and Port Talbot indicate the determination of the Government to take effective action to deal with the problems. We accept that the Government are obliged to deal with the social consequences of change and must seek to rebuild the industrial infrastructure in the area.
I fully appreciate the points made by my hon. Friend the Member for Wolverhampton, South-West (Mr. Budgen) and understand the need not to weaken the areas that were once strong in the heartland of Britain. But he must face the fact that the speed of change that now confronts Wales is dramatic. It imposes social obligations on the Government. It is easy to talk of mobility, and perhaps we should have greater mobility, but the people of this country do not live in tents. Social communities are of real value and deserve investment. When major industries are closed, it is no solution to expect the population to move. The Goverment have an obligation to provide infrastructure and to encourage industry to develop.

Mr. Budgen: I am sure that the Minister does not seek to exaggerate my case. I accept that people do not live in tents and that any Government must accept their social obligations. I say that that must be carefully balanced against the long-term damage, for the best motives, to the once-prosperous areas.

Mr. Edwards: We are at one on the need for the proper control of expenditure.

Mr. John Silkin: Does the Minister agree that the dangers to the Midlands, the heartland of British industry, were detected long ago by Joseph Chamberlain? He attributed that danger not to assistance to Wales, which has gone on for generations, but to the growing importation of manufactured goods. Will the Secretary of State for Wales refute the argument of the Secretary of State for Industry that the reason for decline in the Midlands is the immigration of people from the New Commonwealth?

Mr. Edwards: I shall not be diverted at this time of night on the effect of import controls or immigration. We are dealing with a specific and limited issue—the financial limits on the Welsh Development Agency. I shall confine my remarks to Wales.
In Committee the point was made that the WDA has spent only half its present limit of £250 million after four years. The latest calculations show that that is an overestimate. By the end of this financial year the agency will have spent little more than £107 million. The £48 million that I anounced on Monday will count against the WDA's financial limit and have an impact on the timing. If there is any anxiety about the effect of the financial limit, the Government will take decisions year by year, taking into account the finances of the country and the needs of an area. All that we seek to do is to ensure that the House has effective control.
When the limit runs out we shall, if necessary, introduce primary legislation to extend the life of the WDA. My commitment to the work of the WDA is known. I have made it clear by my actions that I support it in the good work that it is doing. It is right to ask the House for approval, by primary legislation, when further funds are required rather than to rush through an order with inadequate debate,

Mr. George Robertson: Is the Secretary of State aware that the Industry Act 1979 changed the borrowing limit for the Welsh and Scottish Development Agencies? The external borrowing of the subsidiaries now counts against the

borrowing limit. The right hon. Gentleman talks about introducing primary legislation when, by increasing the amount of private sector money invested in joint ventures, both agencies may have to refuse money until primary legislation is passed in an already congested timetable.

Mr. Edwards: As the WDA has made perfectly clear, it sees its primary role as preparation of the infrastructure and its advance factory building programme. Although it sees a role for itself in investment, that is largely confined to the smaller businesses. I do not believe that there will be a situation in which there will be large investments of the kind that would have the effect described by the hon. Gentleman. The WDA does not see itself, and the Government do not see it, having large subsidiaries that are likely to add to the agency's borrowing in that way. Therefore, I do not think that it is a serious point.

Mr. Robertson: May I ask the right hon. Gentleman to look at the Official Report of the Committee proceedings? There he will find that his hon. Friend the Under-Secretary of State for Industry said, on this point:
The Government intend that private sector investment should be given substantial encouragement. We look to see a substantial degree of partnership between the private sector and the Welsh Development Agency.
The rest of what the hon. Gentleman said confirmed that. He said:
The total amount of money that will become available will therefore be much greater than it would be without a partnership bringing in private sector investment."—[Official Report, Standing Committee E. 13 December 1979; c 662.]
Does not that confirm my point and negate what the right hon. Gentleman said?

Mr. Edwards: It does not at all, because the hon. Gentleman has misunderstood the kind of partnership that we envisage. We certainly do not envisage an investment partnership in which the agency has substantial subsidiary companies. What we believe we can do is to bring private sector money into the ownership of factories. The WDA will be able to sell off and dispose of factories and turn over its assets in this way. What the Government seek to do is to relieve the public sector of the burdens being


placed on it in a factory building programme by turning over the agency's assets and making private sector resources available in the factory building programme and in the acquisition of industrial sites.
A great deal of preparatory work is being done. Whatever general points were made in Committee in connection with the NEB and the Scottish Development Agency, I am dealing with an amendment concerning the Welsh Development Agency's policy. I have described the kind of investment from the private sector that the agency is energetically seeking. I am sure that the House, particularly my hon. Friends, will be glad that we are seeking to ease the burden on the taxpayer and the public sector by seeking finance of this kind.
I say particularly to my hon. Friend the Member for Flint, West (Sir A. Meyer) that this is in no way a matter that weakens the Government's determination to give any necessary support to the Agency for the kind of measures that we have announced at Shotton or in South Wales or for the other work that it is doing, but we believe that if substantial additional funds are required in the future it is right that they should be properly and fully considered by the House.

Mr. Wigley: This has been a brief but important debate. I understand that the Secretary of State bases his argument on two matters. First, he would prefer that any additional funds for the WDA should come through primary legislation as opposed to being provided by order, but if a crisis develops and we need additional funds immediately we shall come up against the problem of the tremendous pressure on the legislative programme. If legislative provision were found possible and were put to the House, it would—in the same way as the right hon. Gentleman has described under the procedure for an order—be taken late at night, and perhaps with less attention than the major Bills receive.
Section 18 of the 1975 Welsh Development Agency Act provides that the order for extending by £150 million the funds for the WDA
shall not be made unless a draft of it has been approved by resolution of the House of Commons.

So there is provision for democratic control. The reality is that many important and far-reaching decisions are taken in this Chamber after 10 o'clock. The likelihood of a Bill to amend the WDA Act being taken at any other time is reasonably remote. I do not believe that that is a genuine argument against the provision of this £150 million.
The right hon. Gentleman's other argument is that adequate finances are already available to the WDA to meet foreseeable needs and that these, together with the funds available from the private sector, should be enough. I do not think that that stands up to any analytical test. If, as I postulate—I accept that the right hon. Gentleman may not agree with all the figures—we are talking of potential unemployment of 150,000, and given that there are now 90,000 unemployed and that there were 100,000 in a cyclical situation under the last Government, and given also that there is considerable unemployment in the pipeline—I think that 150,000 is highly likely—to bring that figure down to 50,000 will mean creating 100,000 additional jobs.
Let us assume that only half of those are in manufacturing industries and that the investment is at a cost of £10,000 per job. It means that we are talking about £500 million. If only half of that were forthcoming from the private sector, it would mean that another £250 million would be needed now, over and above what has been invested by the WDA, in addition to the infrastructure work that it is required to undertake in terms of providing sites, land clearance and so on.
Given all those circumstances, the likelihood—indeed, the certainty—is that in the lifetime of this Parliament we shall need more than the provision of the 1979 Act, which amended the 1975 Act—that is, £250 million. I put it to the right hon. Gentleman that as an act of commitment, as a symbol to the people of Wales, the Government should accept that it is not unreasonable to leave the £150 million provision in the original Act, so that it can be drawn upon immediately it is needed and so that the people of Wales can see that the Government are serious about giving the WDA the elbow room that it needs and providing the resources


that it needs to counteract the unemployment situation.

Mr. George Robertson: I rise to speak, if only briefly, because I feel disturbed about what the Secretary of State for Wales said. I concede that the right hon. Gentleman comes fresh to this debate. There was no Welsh Minister on the Committee that considered the Bill. Although the other Celtic fringe was well represented on the Committee, perhaps the Welsh dimension was better represented on the Opposition Benches.
However, the right hon. Gentleman cannot get away from the fact that his hon. Friend the Under-Secretary of State for Industry made a number of comments on this matter and that the House deserves some explanation of the dichotomy of views.
The hon. Member for Flint, West (Sir A. Meyer) made a powerful speech on this subject in Committee. He demanded a number of assurances from his hon. Friend about the financial limits that we are debating. I shall do no more than quote the hon. Gentleman's peroration:
Despite reassurances from the Welsh Office that the Welsh Development Agency will not need anything like these financial limits, I can foresee the situation getting out of hand at such a rate that these limits will rapidly reveal themselves as inadequate. So I need some reassurance on that matter.
Galloping to the rescue of the Government's majority in Committee came the Under-Secretary of State for Industry, and it was in that context that the hon. Gentleman gave the reassurance that I quoted. It is important that the Secretary of State should realise what was said on his behalf in that Committee, because it differs markedly from what he has told the House this evening. The Under-Secretary of State said:
The Government intend that private sector investment should be given substantial encouragement…The total amount of money that will become available will therefore be much greater than it would be without a partnership bringing in private sector investment."—[Official Report, Standing Committee E, 13 December 1979; c. 650–62.]
That may have placated the hon. Member for Flint, West—I do not know—but it has certainly not placated me. If we are to believe that the only mechanism by which the WDA and the SDA, and the NEB as well, are to be funded is by attracting private sector investment in partnership, it will need primary legislation,

perhaps taking months to go through all the procedures of the House, in order to increase the borrowing limits so that that private sector investment can even be used legally within the context of the Bill.
I hope that overnight the Secretary of State for Wales will consult his colleagues in the Department of Industry in order that we may get a coherent and sensible view from the Government about what sort of predicament will face the people of Wales and Scotland if the demand for resources is what all the indicators in the economy suggest it will be.

Mr. Nicholas Edwards: I have already consulted my hon. Friend. He reminds me that the remarks that have been quoted were made in the context of the discussion about Shotton and the need for effective measures there. The fact is that he was thinking exactly as I was thinking and, indeed, telling the House just now: that we were talking about the potential for private sector investment in the very attractive industrial sites there. We see considerable attractions for private investment there. We are taking energetic measures to initiate a programme to that end, and we shall do so.
On the pure investment side—shareholdings in companies—it is not the intention of the agency or the Government to have a programme on a scale that is likely to distort the figures about which we are talking in this part of the Bill. The present investment budget being allocated in the coming year is about £3 million or £4 million, out of its total expenditure. We are not dealing with sums of money that will distort the figures about which I have been talking.
The hon. Member for Caernarvon (Mr. Wigley) talked about a cost of £10,000 per job. Whether or not one accepts such a figure, it certainly will not come from the WDA. That is a combination of the various forms of assistance that are available to the Government under the Industry Act, under selective financial assistance, and so on, and would certainly not be a cost per job in terms of the contribution made through the WDA.
If we are dealing with the scale of the package, the WDA will have spent a little more than £107 million by the end of this financial year. The additional provision that I have announced for Shotton and


for South Wales covers a period of two years. I do not anticipate any such violent upsurge that we could not deal with it by legislation. Although the hon. Member for Hamilton (Mr. Robertson) tells us that this matter can be dealt with briefly and quickly by order late at night, I think that there are many hon. Members who feel that it is wrong that we should vote large sums of public money in so casual a way, and that is the Government's view. We intend to give the House, whenever it is possible—and it is clearly possible in this case—ample time to consider and debate these issues. That is a responsible and proper way to deal with the matter.

Mr. George Robertson: Perhaps the hon. Member for Flint, West (Sir A. Meyer), who obviously wishes to intervene, might make the case even better than I can. Perhaps I may correct the Secretary of State, before he gets into even more trouble on this subject, by telling him that the discussion in the Committee had nothing whatsoever to do with Shotton. The hon. Member for Flint, West had been talking specifically, as reported at column 650, about the WDA's borrowing limits. His hon. Friend the Minister, who was busy giving him references just now, will see, if he turns to column 662, from which I was quoting, that the hon. Member was referring to the WDA's borrowing limits and that the discussion at that stage had nothing whatsoever to do with Shotton.

Mr. Edwards: With great respect—

Sir Anthony Meyer: For the record, and before I am used as a battering ram,

while I admit that I am still as agnostic as ever I was over the necessity for removing these powers of the Secretary of State, I am impressed by the celerity with which my right hon. Friend has responded to the emergency. However, I am satisfied that the existing powers provide the means to do what he seeks and I do not see the need to remove them.

Mr. Edwards: I am surprised that the hon. Member for Hamilton has not bothered to read the Hansardthat he has just drawn to my attention. He told me that he was referring to colum 662. My hon. Friend the Under-Secretary went on in the next sentence to give us the example of the Deeside estate:
which is coming on stream for the building of new factories, we expect that there will be substantial partnership between the public and the private sector."—[Official Report, Standing Committee E, 13 December 1979; c. 662.]
The hon. Member for Hamilton may not know—he is unfamiliar with Wales—that the Deeside industrial estate is at Shotton. That is what we are talking about, and that is what I was talking about. The hon. Member is wrong and I am right. Before he misleads the House, he should read what was said in Committee. There is nothing else that needs to be said.

Mr. Wigley: Mr. Wigley rose—

Mr. Deputy Speaker: Order. The Minister has sat down.

Question put, That the amendment be made:—

The House divided: Ayes 58, Noes 247.

Division No. 159]
AYES
[11.46 pm


Adams, Allen
Evans, John (Newton)
Powell, Raymond (Ogmore)


Alton, David
Golding, John
Prescott, John


Bennett, Andrew (Stockport N)
Haynes, Frank
Roberts, Ernest (Hackney North)


Booth, Rt Hon Albert
Hogg. Norman (E Dunbartonshire)
Robertson, George


Brown, Ron (Edinburgh, Leith)
Holland, Stuart (L'beth, Vauxhall)
Rooker, J. W.


Campbell-Savours, Dale
Home Robertson, John
Rowlands, Ted


Cant, R. B.
Janner, Hon Greville
Silkin, Rt Hon John (Deptford)


Concannon, Rt Hon J. D.
Johnston, Russell (Inverness)
Smith, Cyril (Rochdale)


Craigen, J. M. (Glasgow, Maryhill)
Jones, Rt Hon Alec (Rhondda)
Smith, Rt Hon J. (North Lanarkshire)


Crowther, J. S.
Lambie, David
Spearing, Nigel


Cryer, Bob
Lamond, James
Steel, Rt Hon David


Cunliffe, Lawrence
McCartney, Hugh
Stott, Roger


Cunningham, Dr John (Whitehaven)
MacKenzie, Rt Hon Gregor
Tinn, James


Davidson, Arthur
Maclennan, Robert
Torney, Tom


Davis, Terry (B'rm'ham, Stechford)
McNamara, Kevin
Welsh, Michael


Dixon, Donald
McWilliam, John
Wrigglesworth, Ian


Dormand, Jack
Marks, Kenneth



Dunnett, Jack
Maxton, John
TELLERS FOR THE AYES:


Dunwoody, Mrs. Gwyneth
Morton, George
Mr. Dafydd Wigley and 


Ellis, Tom (Wrexham)
Parry, Robert
 Mr. Gordon Wilson.


English, Michael
Penhaligon, David





NOES


Aitken, Jonathan
Gorst, John
Patten, Christopher (Bath)


Alexander, Richard
Gow, Ian
Patten, John (Oxford)


Alison, Michael
Gower, Sir Raymond
Pawsey, James


Ancram, Michael
Greenway, Harry
Percival, Sir Ian


Arnold, Tom
Grieve, Percy
Pink, R. Bonner


Aspinwall, Jack
Griffiths, Peter (Portsmouth N)
Pollock, Alexander


Atkins, Rt Hon H. (Spelthorne)
Grist, Ian
Price, David (Eastleigh)


Baker, Kenneth (St. Marylebone)
Grylls, Michael
Proctor, K. Harvey


Baker, Nicholas (North Dorset)
Gummer, John Selwyn
Rathbone, Tim


Beaumont-Dark, Anthony
Hamilton, Hon Archie (Eps'm&amp;Ew'll)
Rees, Peter (Dover and Deal)


Bendall, Vivian
Hamilton, Michael (Salisbury)
Renton, Tim


Benyon, Thomas (Abingdon)
Hampson, Dr Keith
Rhodes James, Robert


Benyon, W. (Buckingham)
Haselhurst, Alan
Rhys Williams, Sir Brandon


Berry, Hon Anthony
Havers, Rt Hon Sir Michael
Ridley, Hon Nicholas


Best, Keith
Hawksley, Warren
Rifkind, Malcolm


Biffen, Rt Hon John
Heddle, John
Roberts, Wyn (Conway)


Biggs-Davison, John
Henderson, Barry
Rose, Wm. (Londonderry)


Blackburn, John
Heseltine, Rt Hon Michael
Rossi, Hugh


Blaker, Peter
Hicks, Robert
Rost, Peter


Bonsor, Sir Nicholas
Hill, James
Royle, Sir Anthony


Bottomley, Peter (Woolwich West)
Hogg, Hon Douglas (Grantham)
Sainsbury, Hon Timothy


Bowden, Andrew
Holland, Philip (Carlton)
St. John-Stevas, Rt Hon Norman


Boyson, Dr Rhodes
Hooson, Tom
Shaw, Giles (Pudsey)


Bradford, Rev. R.
Hordern, Peter
Shaw, Michael (Scarborough)


Bright, Graham
Howell, Ralph (North Norfolk)
Shelton, William (Streatham)


Brinton, Tim
Hunt, David (Wirral)
Shepherd, Colin (Hereford)


Brittan, Leon
Hunt, John (Ravensbourne)
Shepherd, Richard (Aldridge-Br'hills)


Brocklebank-Fowler, Christopher
Hurd, Hon Douglas
Shersby, Michael


Brooke, Hon Peter
Jenkin, Rt Hon Patrick
Silvester, Fred


Brotherton, Michael
Johnson Smith, Geoffrey
Sims, Roger


Brown, Michael (Brigg &amp; Sc'thorpe)
Jopling, Rt Hon Michael
Speller, Tony


Browne, John (Winchester)
Joseph, Rt Hon Sir Keith
Spence John


Bruce-Gardyne, John
Kaberry, Sir Donald 
Spicer, Michael (S Worcestershire)


Bryan, Sir Paul
Kershaw, Anthony
Sproat, Iain


Buck, Antony
King, Rt Hon Tom
Squire, Robin


Budgen, Nick
Lang, Ian
Stainton, Keith,


Bulmer, Esmond
Lawson, Nigel
Stanbrook, Ivor


Butcher, John
Lee, John
Stanley, John


Butler, Hon Adam
Le Merchant, Spencer
Steen, Anthony


Cadbury, Jocelyn
Lester, Jim (Beeston)
Stevens, Martin


Carlisle, John (Luton West)
Lloyd, Ian (Havant &amp; Waterloo)
Stewart, Ian (Hitchin)


Carlisle, Kenneth (Lincoln)
Lloyd, Peter (Fareham)
Stewart, John (East Renfrewshire)


Carlisle, Rt Hon Mark (Runcorn)
Loveridge, John
Stradling Thomas, J.


Chalker, Mrs. Lynda
Luce, Richard
Taylor, Robert (Croydon NW)


Channon, Paul
Lyell, Nicholas
Tebbit, Norman


Clark, Hon Alan (Plymouth, Sutton)
Macfarlane, Neil
Temple-Morris, Peter


Clark, Sir William (Croydon South)
MacKay, John (Argyll)
Thompson, Donald


Clarke, Kenneth (Rushcliffe)
McNair-Wilson, Michael (Newbury)
Thorne, Neil (Ilfored South)


Cockeram, Eric
McNair-Wilson, Patrick (New Forest)
Thornton, Malcolm


Colvin, Michael
McQuarrie, Albert
Townend, John (Bridlington)


Cope, John
Major, John
Townsend, Cyril D. (Bexleyheath)


Corrie, John
Marland, Paul
Trippier, David


Costain, A. P.
Marlow, Antony
Trotter, Neville


Cranborne, Viscount
Marshall, Michael (Arundel)
van Straubenzee, W. R.


Critchley, Julian
Marten, Neil (Banbury)
Viggers, Peter


Crouch, David
Mather, Carol
Waddington, David


Dickens, Geoffrey
Mawby, Ray
Wakeham, John


Dorrell, Stephen
Mawhinney, Dr Brian
Waldegrove, Hon William


Douglas-Hamilton, Lord James
Maxwell-Hyslop, Robin
Walker, Rt Hon Peter (Worcester)


Dover, Denshore
Mayhew, Patrick
Walker, Bill (Perth &amp; E Perthshire)


Dunn, Robert (Dartford)
Mellor, David
Wall, Patrick


Durant, Tony
Miller, Hal (Bromsgrove &amp; Redditch)
Waller, Gary


Eden, Rt Hon Sir John
Mills, Iain (Meriden)
Walters, Dennis


Edwards, Rt Hon N. (Pembroke)
Miscampbell, Norman
Ward, John


Eggar, Timothy
Mitchell, David (Basingstoke)
Warren, Kenneth


Emery, Peter
Moate, Roger
Watson, John


Eyre, Reginald
Molyneaux, James
Wells, John (Maidstone)


Fairbairn, Nicholas
Monro, Hector
Wells, Bowen (Hert'rd &amp;Stev'nage)


Fairgrieve, Russell
Montgomery, Fergus
Wheeler, John


Faith, Mrs Sheila
Morgan, Geraint
Whitelaw, Rt Hon William


Farr, John
Morris, Michael (Northampton, Sth)
Whitney, Raymond


Fenner, Mrs Peggy
Morrison, Hon Peter (City of Chester)
Wickenden, Keith


Finsberg, Geoffrey
Mudd, David
Wiggin, Jerry


Fisher, Sir Nigel
Murphy, Christopher
Williams, Delwyn (Montgomery)


Fletcher, Alexander (Edinburgh N)
Myles, David
Winterton, Nicholas


Fletcher-Cooke, Charles
Neale, Gerrard
Wolfson, Mark


Forman, Nigel
Needham, Richard
Young, Sir George (Acton)


Fox, Marcus
Nelson, Anthony
Younger, Rt Hon George


Fraser, Rt Hon H. (Stafford &amp; St)
Neubert, Michael



Fraser, Peter (South Angus)
Normanton, Tom



Gardiner George (Reigate)
Nott, Rt Hon John
TELLERS FOR THE NOES:


Garel-Jones, Tristan
Page, Rt Hon Sir R. Graham
Mr. John MacGregor and Mr. Tony Newton.


Gilmour, Rt Hon Sir Ian
Page, Richard (SW Hertfordshire)



Goodhart, Philip
Parris, Matthew

Question accordingly negatived.

Sir Keith Joseph: I beg to move amendment No. 12, in page 4, line 6, at end insert—
'(2) After section 8(2) of the Industry Act 1975, there shall be inserted—
"(2A) The Secretary of State may by order provide for the limit specified in subsection (2) above to be reduced or further reduced to such amount not less than £750 million as may be specified in the order.
(2B) Notwithstanding section 38(2) below, an order under subsection (2A) above may not be revoked or varied by a later order except in connection with the making of a further reduction in the limit specified in subsection (2) above.
(2C) No order shall be made under subsection (2A) above unless a draft of it has been approved by resolution of the House of Commons."
(3) Subject to subsection (4) below, the Secretary of State shall by order specify an amount as the financial limit for the purposes of section (Finance for companies transferred to Secretary of State), and may by order increase or further increase the amount so specified.
(4) The aggregate of the amounts for the time being specified under subsection (3) above and in section 8(2) of the Industry Act 1975 shall not exceed £3,000 million.
(5) The power to make orders under subsection (3) above shall be exercisable by statutory instrument, and no such order shall be made unless a draft of it has been laid before and approved by resolution of the House of Commons.
(6) Subject to subsection (7) below, the aggregate of—
(a) any sums paid by the Secretary of State under this Act in respect of the acquisition of shares in any company which before or immediately after the acquisition was a company to which section (Finance for companies transferred to Secretary of State) applied,
(b) the amounts outstanding, otherwise than by way of interest, in respect of the general external borrowing of companies to which that section applies, and
(c) any sums paid by the Secretary of State to meet guarantees given under subsection (2)(c) of that section, to the extent that they have not been repaid,
shall not exceed the amount which is for the time being the financial limit for the purposes of that section.
(7) The sums paid by the Secretary of State under this Act in respect of the acquisition from the National Enterprise Board of shares in any company shall be treated for the purposes of subsection (6) above as reduced by an amount equal to so much of the debt of the Board assumed under paragraph 6(1) of Schedule 2 to the Industry Act 1975 on their acquisition of securities of the company as was immediately before section (Finance for companies transferred to Secretary of State) applied to the company treated by virtue of

paragraph 5(2) of that Schedule as part of the Board's public dividend capital.
(8) For the purposes of subsection (6)(b) above, the general external borrowing of a company is the aggregate of—
(a) sums borrowed by the company otherwise than from any subsidiary of the company, and
(b) sums borrowed by such a subsidiary otherwise than from the company or another such subsidiary.'.

Mr. Deputy Speaker: With this it will be convenient to take new clause 1—Finance for companies transferred to Secretary of State—and Government amendment No. 32.

Sir K. Joseph: The new clause and the associated amendment to clause 4, although complex and substantial, are essentially technical adjuncts to clause 2, which was fully debated on Second Reading and in Committee.
In Committee on 11 December, before clause 2 was discussed, I explained why the additions were necessary. When the Bill was introduced, I thought that the powers available under the Industry Act 1972—and for Rolls-Royce in particular under the Rolls-Royce (Purchase) Act 1971—and the Civil Aviation Act 1949would enable me to provide finance to companies transferred to my ownership from the NEB. However, on further consideration and advice I decided to seek new powers not simply to provide the necessary finance but to enable it to be done within an appropriate framework of parliamentary accountability and control.
As the House knows, it is the Government's intention that Rolls-Royce should be transferred from the NEB after the Bill becomes law. The possibility cannot be ruled out that British Leyland will be dealt with in the same way; no decision or commitment of any sort has yet been made. It needs most careful consideration. I do not expect to make a further statement on the matter for some time. The transfer of either or both of those companies will have important implications for the NEB's statutory financial limit, and those implications are dealt with in the associated amendment to clause 4.
The House may find it helpful if I say something about the Government's intentions in relation to the exercise of these new powers. Apart from British Leyland and Rolls-Royce, which I have already


dealt with, it is not our intention that my Department should require other shareholdings from the NEB simply in order to reduce the size of its investment portfolio. That would be quite inconsistent with the Government's policy that the NEB should promote the private ownership of its holdings, as clause 1 provides.

12 midnight

The amendment provides that where any company is moved under the procedure laid down in the new clause from the NEB to the Secretary of State, an equivalent movement of borrowing limits shall be made, provided that the—

Mr. John Silkin: On a point of order, Mr. Deputy Speaker. Some of us cannot hear the Secretary of State.

Mr. Deputy Speaker: I can hardly hear the right hon. Gentleman myself.

Sir K. Joseph: —aggregate of the borrowing powers of the Secretary of State, as laid down in the amendment to clause 4, and of the NEB as reduced by any power under the amendment to clause 4 shall not exceed the total of £3,000 million laid down in the Bill.
The House will remember that the Bill removes the power to increase by order the £3,000 million to £4,500 million which had been given to the then Government by the Industry Act 1979. It is not possible to estimate how much will be needed, but we take the view—as my right hon. Friend the Secretary of State for Wales has already explained—that if there is a need to ask for more financing power it is proper for the Government openly to explain to the House what they want, rather than to use, late at night or at any other time, powers under an order.
It is difficult to foresee what the aggregate borrowing requirement would be, taking into account the uncertainties connected with both Rolls-Royce and British Leyland. These borrowing powers do not in themselves convey any particular implication for public spending. The borrowing powers include, under the arrangements made by the previous Administration, the private sector borrowing of the companies in the ownership of the NEB or transferred from the NEB to the Secretary of State, as well as any public money invested in them.
Amendment No. 32 is consequential to the new clause and to the amendment to clause 4.

Mr. George Robertson: As the Secretary of State said, it is a complex series of amendments which are simple in intent. However, they are extremely important, because both clause 4 and the amendments that have suddenly appeared from the recesses of the Department of Industry since the Bill was introduced in November show that a number of realities have caught up with the Government.
The discussion that we are having this evening on the new clause and the amendment to clause 4 could variously be described as the chickens coming home to roost, or even the cookies beginning to crumble. Round the edges we are beginning to see the ideologies starting to fray against the realities of British industrial life.
The existing clause 4, for no good or clear reason, sought to impose a new inflexibility on the arrangements that exist between the funding of the NEB and the Government.
The hon. Member for Flint, West (Sir A. Meyer), in the previous debate, said that although he was in support of the Government's view he could see no good reason for seeking to abolish a power that merely gave the Government the opportunity of providing more finance, with all the bother, hassle and cost of primary legislation to do so.
Almost side by side with the power in clause 2—that the Secretary of State should have no obligation to tell Parliament when he has issued a direction to transfer assets from the NEB to the Department of Industry—we have the Government holding up their hands in horror at the suggestion that they might introduce an order late at night to increase the borrowing limits of the NEB and of the agencies. The Bill—and this clause specifically—is the result of the dogmatic obsession of the Government with reducing the NEB's role within the economy.
Close examination of the new phenomenon on the Notice Paper tonight will increase the fears of those who had grave doubts about Government intervention and interference and giving excess powers to the Secretary of State


and to civil servants. It is interesting that the hon. Member for Knutsford (Mr. Bruce-Gardyne), who found this a matter of such urgency that he could not vote with the Government on 6 November, has not been present this evening, when the Government are seeking to increase their powers. But those who had genuine reservations about Government intervention are likely to find their fears increased by what the Government are proposing now.
The new clause and the amendment are necessary because the Bill was produced in haste at the dictates of the dogma of its architects. There can be no other explanation for our being confronted with a new money resolution, two major new clauses and a 50-line amendment to a clause of only five lines. That is evidence that the legislation was ill thought out. Anyone who thinks that that is far fetched has only to wait until we come to the Government amendments to clause 6 to realise that the Government made a mistake of judgment and of reality yet again. This legislation is ill thought out and ill considered.
I turn now to the effect of the amendment on the clause. The Opposition believe—and Conservative Members believe, although not so publicly—that the removal of the power to increase by order the borrowing limits of the NEB and of the agencies is a shameful, irresponsible and short-sighted approach to the problems that will confront the economy of the areas covered by those bodies. The removal of that power will save not a penny of public money. It will impose on the Government the inflexibility of having to introduce new primary legislation if the need should arise for these borrowing limits to be increased.
I should like to remind the House of part of the debate on the Industry Bill which took place on 8 February 1979. This is almost the anniversary date of the debate in the Industry Bill Committee in which the Under-Secretary of State for Industry, the Under-Secretary of State for Scotland and the Secretary of State for Scotland played a vociferous part. The right hon. Member for Ayr (Mr. Younger), who is now Secretary of State for Scotland, said:

The happy noise I should like to make is to say that the ongoing activities of the SDA will receive great encouragement and asssistance from the future Conservative Government and be all the better for the fact that that Government will be able to produce the money as and when it is required for viable projects which are needed in the cause of producing jobs in Scotland."—[Official Report, Standing Committee B, 8 February 1979; c. 132.]
The unemployment figure in Scotland last month went over the 200,000 mark. It is escalating and increasing every day. The present Secretary of State for Scotland said a year ago that the SDA would be in a position to get the money as and when it required it. He was participating in that Committee in an exercise that changed the definition of the total borrowing limit of the NEB, the SDA and the Welsh Development Agency. The definition was changed in that Bill to encompass the borrowing of the subsidiary companies of the NEB, the SDA and the WDA.
No longer, for public accounting procedures, was the expenditure of these bodies simply to be counted against the borrowing limit. The external borrowings from the private sector of subsidiary companies were now to be counted against the borrowing limit. When the Government say that the base-line figures of the Industry Act 1979 are to be encompassed in the Bill, it means that they will not be increased other than through primary legislation in this House. If, however, the agencies and the NEB are able to get an increased amount of private sector finance in partnership with their own pump-priming operations and their own catalytic investments, to which the Secretary of State refers, there could easily come a stage, if that were successful, where they would be unable to take on board any more private sector money unless primary legislation was passed through the House.
To hon. Members who do not come from Scotland and who have not seen the Scottish press today, let me say that the new Conservative Government-appointed chairman of the Scottish Development Agency has announced that a new scheme is to be embarked upon by the agency. At his own instigation, perhaps, the chairman has said that the agency will compile a list of companies willing to come into partnership with the


agency in the case of problem companies, companies with weak management, and those with short-term liquidity problems.
What the chairman of the Scottish Development Agency possibly does not know, but what the old board of the National Enterprise Board saw only too clearly, was that if that sort of policy, as we must hope, was successful—the Conservative Government are encouraging it all along the line—there could easily come a time when the necessity for primary legislation in a congested timetable, conceivably near the end of a Session, could mean that there would be no prospect even of taking on board voluntary funds from the private sector. I do not believe that the Government have recognised this practical problem, which could create serious problems for the National Enterprise Board and the development agencies.
No public money will be saved as a result of the clause. Not a penny of public funds will be saved if the Government eliminate the ability to increase the borrowing limit by order. The Government have to tackle the increase in the borrowing limit anyway. The initiative is entirely in their hands. But the Government are removing a flexibility that, on their current form, they may need to invoke in the not-too-distant future.
I shall save the House from the quotations that I had intended to give. They formed an important part of our preceding debate.
A dangerous precedent has been established by the Government. They seem to think that they can now embark on a procedure of primary legislation for practical instances in industry where money is needed simply to involve the private sector in these quasi-public sector companies.

I turn more specifically to the amendment under discussion. As the Secretary of State said, it provides a number of limits. It provides a lower borrowing limit for the National Enterprise Board of £750 million below which the Government cannot go. At the same time, it provides an upper limit of an aggregate of £3,000 million for the total requirements of the Department of Industry for whatever investments it takes unto itself and for the

NEB. The Secretary of State said that the amendment and new clause 1, which should, quite properly, have been an adjunct to clause 2, will not be used with the intentions put forward by the Opposition in the debate on clause 2, because the Government do not intend to acquire other investments from the NEB. He said that this would be wholly inconsistent with their policy.

It may be wholly inconsistent with the Secretary of State's philosophy, and it may indeed be inconsistent with the present Government's approach, but if one looks at the track record of the last Conservative Administration one realises that it will not be long before the economic climate outside the House forces this Government to look differently at whatever powers are available to them. The Secretary of State should not forget that, especially as he was part of that last Administration which produced the 1972 Industry Act, which formed the basis for the 1975 Act introduced by my right hon. Friend the Member for Bristol, South-East (Mr. Benn). The powers to take equity from industry were Conservative-inspired. They came from the 1972 Act.

I accept that the Secretary of State is an honourable man. He believes passionately in the philosophy that is motivating the Government at present. But the Selsdon men who came to power in 1970 were also inspired by this same belief in monetarism. They were inspired by the same belief that the free market would be able to rescue us from our economic plight. But by 1972 they were delving back into intervention in order to save the country from the crippling effect of their original policy. The Secretary of State for Industry might believe completely and totally that there will not be a change in direction, but Conservatives should search their hearts and think whether these powers could be used by the present Secretary of State or some future Secretary of State. Once this is in the cold, hard tablets of the statute book, these powers are open to anybody to use.

Any pretence that the aggregate borrowing limit of £3,000 million is any protection at all from the nationalisers or public owners who simply want to interfere in industry is really a smokescreen. The £3,000 million is only an aggregate financial limit on borrowing loans and guarantees. There is nothing in the Bill


to suggest that if the Government were able to take subsidiary companies of the NEB that did not require loans or guarantees there would be any limit at all.

Admittedly, £3,000 million allows only one British Leyland or one Rolls-Royce to be taken into Government hands, but if one assumes that the Government will back off, as one expects, from taking British Leyland out of the hands of the NEB—and I am sure that the new board would resist this violently—that fact is that £3,000 million will enable them to take into public ownership a substantial number of companies and still be within the aggregate. So long as they require little or no funding from the public purse, there is no limit. That power is provided in the amendment, and I wonder whether the Government have sufficiently thought it out.

It is not simply the ability of the Government to get over the immediate problems that they have found in the original drafting of the Bill that is at stake in the amendments. We shall return again and again to the ill-considered way in which many of these features have been built into the Bill.

Parliamentary accountability is being weakened. Powers are being given to the Secretary of State for Industry at all levels—powers that the Government may seriously and sincerely believe will never be used. On the one hand we have heard

the Government proclaim their belief in the need for primary legislation, and yet in an earlier debate they proclaimed a similar belief in secondary legislation, asserting that the tabling of orders and documents in the Library would be a sufficient way of informing the House.

The clause and the amendments that have suddenly appeared on the Notice Paper to change it are significant signs that the real world has caught up with the Government. I quote from a recent book:
It is the flatearthers that are staring in the face the astronauts.
The Government are incapable of deciding whether they are seeing a vision or whether they really must undertake a change in their whole philosophy.

I hope that the House will look upon the Government's proposals with the gravest distrust.

Amendment agreed to.

Clause 5

RESTRICTIONS ON POWERS TO ACQUIRE SHARES

Amendment proposed: No. 13, in page 4, leave out lines 7 to 30.—[Mr. John Silkin.]

Question put, That the amendment be made:—

The House divided: Ayes 29, Noes 222.

Division No. 160]
AYES
[12.23 am


Adams, Allen
Haynes, Frank
Prescott, John


Bennett, Andrew (Stockport N)
Holland, Stuart (L'beth, Vauxhall)
Roberts, Ernest (Hackney North)


Brown, Ron (Edinburgh, Leith)
Janner, Hon Greville
Robertson, George


Campbell-Savours, Dale
Lambie, David
Rooker, J. W.


Cant, R. B.
Lamond, James
Silkin, Rt Hon John (Deptford)


Cryer, Bob
MacKenzie, Rt Hon Gregor
Spearing, Nigel


Cunningham, Dr John (Whitehaven)
Maclennan, Robert
Wrigglesworth, Ian


Davis, Terry (B'rm'ham, Stechford)
McMillan, Tom (Glasgow, Central)



Dixon, Donald
McWilliam, John
TELLERS FOR THE AYES:


Dormand, Jack
Penhaligon, David
Mr. John Evans and 


English, Michael
Powell, Raymond (Ogmore)
 Mr. Tom Ellis.


Golding, John






NOES


Alexander, Richard
Best, Keith
Brooke, Hon Peter


Alison, Michael
Biffen, Rt Hon John
Brotherton, Michael


Ancram, Michael
Biggs-Davison, John
Brown, Michael (Brigg &amp; Sc'thorpe)


Arnold, Tom
Blackburn, John
Browne, John (Winchester)


Aspinwall, Jack
Blaker, Peter
Bruce-Gardyne, John


Atkins, Rt Hon H. (Spelthorne)
Bonsor, Sir Nicholas
Bryan, Sir Paul


Atkins, Robert (Preston North)
Bowden, Andrew
Buck, Antony


Baker, Kenneth (St. Marylebone)
Boyson, Dr Rhodes
Budgen, Nick


Beaumont-Dark, Anthony
Bradford, Rev. R.
Bulmer, Esmond


Bendall, Vivian
Bright, Graham
Butcher, John


Benyon, Thomas (Abingdon)
Brinton, Tim
Butler, Hon Adam


Benyon, W. (Buckingham)
Brittan, Leon
Cadbury, Jocelyn


Berry, Hon Anthony
Brocklebank-Fowler, Christopher
Carlisle, John (Luton West)




Carlisle, Kenneth (Lincoln)
Hurd, Hon Douglas
Rhodes James, Robert


Carlisle, Rt Hon Mark (Runcorn)
Jenkin, Rt Hon Patrick
Rhys Williams, Sir Brandon


Chalker, Mrs. Lynda
Jopling, Rt Hon Michael
Rifkind, Malcolm


Channon, Paul
Joseph, Rt Hon Sir Keith
Roberts, Wyn (Conway)


Clark, Hon Alan (Plymouth, Sutton)
Kaberry, Sir Donald
Ross, Wm. (Londonderry)


Clarke, Kenneth (Rushcliffe)
King, Rt Hon Tom
Rossi, Hugh


Cockeram, Eric
Lang, Ian
Rost, Peter


Colvin, Michael
Lawson, Nigel
Sainsbury, Hon Timothy


Cope, John
Lee, John
St. John-Stevas, Rt Hon Norman


Corrie, John
Le Marchant, Spencer
Shaw, Giles (Pudsey)


Costain, A. P.
Lester, Jim (Beeston)
Shaw, Michael (Scarborough)


Cranborne, Viscount
Lloyd, Peter (Fareham)
Shelton, William (Streatham)


Crouch, David
Loveridge, John
Shepherd, Colin (Hereford)


Dickens, Geoffrey
Luce, Richard
Shepherd, Richard (Aldridge-Br'hills)


Dorrell, Stephen
Lyell, Nicholas
Shersby, Michael


Dover, Denshore
Macfarlane, Nell
Silvester, Fred


Dunn, Robert (Dartford)
MacGregor, John
Sims, Roger


Durant, Tony
MacKay, John (Argyll)
Speller, Tony


Eden, Rt Hon Sir John
McNair-Wilson, Michael (Newbury)
Spence, John


Edwards, Rt Hon N. (Pembroke)
McQuarrie, Albert
Spicer, Jim (West Dorset)


Eggar, Timothy
Major, John
Spicer, Michael (S Worcestershire)


Emery, Peter
Marland, Paul
Sproat, Iain


Eyre, Reginald
Marlow, Antony
Squire, Robin


Fairbairn, Nicholas
Marshall, Michael (Arundel)
Stainton, Keith


Fairgrieve, Russell
Marten, Neil (Banbury)
Stanbrook, Ivor


Farr, John
Mather, Carol
Stanley, John


Fenner, Mrs Peggy
Mawby, Ray
Stevens, Martin


Finsberg, Geoffrey
Mawhinney, Dr Brian
Stewart, John (East Renfrewshire)


Fisher, Sir Nigel
Maxwell-Hyslop, Robin
Stradling Thomas, J.


Fletcher, Alexander (Edinburgh N)
Mayhew, Patrick
Taylor, Robert (Croydon NW)


Forman, Nigel
Mellor, David
Temple-Morris, Peter


Fox, Marcus
Meyer, Sir Anthony
Thompson, Donald


Fraser, Rt Hon H. (Stafford &amp; St)
Miller, Hal (Bromsgrove &amp; Redditch)
Thorne, Neil (Ilford South)


Fraser, Peter (South Angus)
Mills, Iain (Meriden)
Thornton, George


Garel-Jones, Tristan
Miscampbell, Norman
Townsend, Cyril D. (Bexleyheath)


Gilmour, Rt Hon Sir Ian
Mitchell, David (Basingstoke)
Trippier, David


Goodhart, Philip
Moate, Roger
Trotter, Neville


Gorst, John
Montgomery, Fergus
van Straubenzee, W. R.


Gow, Ian
Morgan, Geraint
Viggers, Peter


Gower, Sir Raymond
Morris, Michael (Northampton, Sth)
Wakeham, John


Greenway, Harry
Morrison, Hon Peter (City of Chester)
Waldegrove, Hon William


Grieve, Percy
Mudd, David
Walker, Bill (Perth &amp; E Perthshire)


Griffiths, Peter (Portsmouth N)
Myles, David
Wall, Patrick


Grist, Ian
Needham, Richard
Waller, Gary


Grylls, Michael
Nelson, Anthony
Ward, John


Gummer, John Selwyn
Neubert, Michael
Warren, Kenneth


Hamilton, Hon Archie (Eps'm&amp;Ew'll)
Newton, Tony
Watson, John


Hamilton, Michael (Salisbury)
Normanton, Tom
Wells, John (Maidstone)


Hampson, Dr Keith
Osborn, John
Wells, Bowen (Hert'rd &amp; Stev'nage)


Haselhurst, Alan
Page, Rt Hon Sir R. Graham
Wheeler, John


Havers, Rt Hon Sir Michael
Page, Richard (SW Hertfordshire)
Whitney, Raymond


Hawksley, Warren
Parris, Matthew
Wickenden, Keith


Heddle, John
Patten, Christopher (Bath)
Wiggin, Jerry


Henderson, Barry
Patten, John (Oxford)
Williams, Delwyn (Montgomery)


Hicks, Robert
Pawsey, James
Winterton, Nicholas


Hill, James
Percival, Sir Ian
Wolfson, Mark


Hogg, Hon Douglas (Grantham)
Pink, R. Bonner
Young, Sir George (Acton)


Holland, Philip (Carlton)
Pollock, Alexander
Younger, Rt Hon George


Hooson, Tom
Proctor, K. Harvey



Hordern, Peter
Rathbone, Tim
TELLERS FOR THE NOES:


Howell, Ralph (North Norfolk)
Rees, Peter (Dover and Deal)
Lord James Douglas-Hamilton and 


Hunt, David (Wirral)
Renton, Tim
 Mr. David Waddington.


Hunt, John (Ravensbourne)

Question accordingly negatived.

Clause 6

MEMBERS OF THE BOARD AND AGENCIES

Mr. David Mitchell: I beg to move amendment No. 14 in page 4, line 35, leave out from beginning to 'and' in line 40.

Mr. Deputy Speaker: With this amendment it will be convenient to take Government amendments Nos. 15, 16 and 30.

Mr. Mitchell: In Committee my hon. Friend undertook that the Government would introduce an amendment on Report to meet the concern expressed by the Opposition about changes that we propose to make in the procedure for the future appointment of the chief executives of the NEB and the agencies. We provided for the Secretary of State to nominate the chief executive. The amendments provide for the boards to appoint their own chief executives with the approval of the Secretary of State.

Mr. John Silkin: On a point of order, Mr. Deputy Speaker. It is difficult to hear what is being said.

Mr. Deputy Speaker (Mr. Richard Crawshaw): May we have quiet in the House, please?

Mr. Mitchell: In the original Bill we provided that the Secretary of State should nominate the chief executives of the NEB and the agencies. The amendment provides for boards to appoint their own chief executives, with the approval of the Secretary of State. This was asked for in Committee, and I am sure that it is welcomed. We are also discussing Government amendment No. 15, which disqualifies the chief executive of the NEB from membership of the House of Commons and of the Northern Ireland Assembly. That is not controversial and it will be welcomed in all parts of the House.

Mr. George Robertson: The House might be surprised, but the Opposition welcome the amendments. If it were not so late and if we did not know that Government Members have a fascination for later debates, we might have made fun out of this issue. I accept that the Government listened carefully to Committee speeches when the difficulties involved in the original plan were highlighted.
We said that the Government had only recently appointed in their own mould new members of the NEB and new chairmen of the Scottish and Welsh Development Agencies. We believed that the Government could place trust in such people. It would have been gross betrayal of that trust and a negation of their appointments if they had continued with the proposal that the Secretary of State should make chief executive appointments. I understand that the previous members of the NEB made strong representations about the difference between the policy-making role of the Government and the managerial role of the members. That was a dilemma for the Government.
Among all the proposals in the Bill, this is the Government's only concession to reality and to the representations by their supporters. The original proposal might have slipped through in the middle of the night when Ministers were still

enjoying the election result. If that is true, it betrays an enormous Freudian slip, which indicates more about the Government's attitude to the way in which the country will be run than many of the things that they are doing today.
The Government are abolishing what they call quangos—the method by which Governments of all political complexions have chosen to run a number of areas of the economy and the environment and many sections of society. They have abolished quangos in the name of an obsession with saving costs. At the same time, they are instituting a bureaucratic, centralist Government philosophy that they used to decry vociferously when they were in Opposition. We can judge from the people whom the Government put in charge of the agencies and other organisations that are still conducting the business of government that the reality is very different from the philosophy that they used to put forward.
I said in Committee that the philosophy behind the original proposal, which is to be eliminated tonight, was an illustration of the role that the Government saw for the NEB and the agencies. In the words of a leader in The Guardian, they were going to reduce the role of the NEB and the agencies to the level of
the average bucket shop operator in the region of the Chiswick flyover".
The Government have shown tonight a slight indication that reality is catching up with their philosophies. In that spirit, the Opposition give a great welcome to the amendments.

Mr. David Mitchell: I have never heard an hon. Member say "Thank you" in so many words.

Amendment agreed to.

Amendments made: No. 15, in page 4, line 42, at end insert—

'(1A) In Part III of Schedule 1 to the House of Commons Disqualification Act 1975 and in Part III of Schedule 1 to the Northern Ireland Assembly Disqualification Act 1975 there shall be inserted, at the appropriate place in alphabetical order—
Chief Executive of the National Enterprise Board.".'.

No. 16, in page 5, line 1, leave out subsections (2) to (4).—[Mr. David Mitchell.]

Clause 9

FUNCTIONS AND STATUS OF THE CORPORATION

Mr. John Silkin: I beg to move amendment No. 17, in page 5, line 41 leave out:
whether in England or elsewhere
and insert "in England".

Mr. Deputy Speaker: With this it will be convenient to take the following amendments:

No. 18, in page 6, line 13, at end insert:
Provided such directions have been confirmed by orders laid before both Houses of Parliament".

No. 19, in line 25, after "any", insert "industrial".

No. 20, in line 26, leave out "end of March 1981" and insert "passing of this Act".

Mr. Silkin: The purpose of amendments Nos. 17 and 19 is to discover what in English the Bill means. In clause 9 we are dealing with the English Industrial Estates Corporation. To our surprise, because most of us believed that its title meant that the corporation was designed to work in England, we find that the wording of subsection (2) is:
Subject to directions given under subsection (3) below, the Corporation may do anything, whether in England or elsewhere, which is calculated to facilitate or is conducive or incidental to the discharge of their functions".
There is no doubt a simple explanation for the phrase "in England or elsewhere", but at about 12.45 in the morning my mind is boggling at the possibilities. Do you think "elsewhere" includes Mars, Mr. Deputy Speaker, or Australia? Perhaps I should not mention Australia at the moment. Perhaps the Under-Secretary will explain.
Amendment No. 19 relates to subsection (5), which says:
Planning permission shall be deemed to have been granted under section 29 of the Town and Country Planning Act 1971 in respect of any development initiated by the Corporation before the end of March 1981.
In view of the title of the corporation, it seems a little odd that the word "industrial" is not inserted in that subsection. I am sure that there are perfect reasons—there usually are—but at first sight it is a little confusing.
Those are two minor points. The other amendments are more important, but I shall probably not have to take them to a Division if I receive from the Under-Secretary the kind of assurances that I want.

I should like some assurances because, as I understand it, the Government are increasing the scope of the English Industrial Estates Corporation. We have no objection to that—indeed, we may find ourselves very much in agreement with it—but some difficulties could arise as a result.

Mr. David Mitchell: To which amendment is the right hon. Gentleman referring?

Mr. Silkin: I am referring to amendments Nos. 18 and 20, but in doing so I am talking about the basis of the clause itself. I hope that the hon. Gentleman will take it in that spirit, because if he does it may save us all a lot of time and enable some of us at any rate to get to our beds a little sooner than we might otherwise do.
The point arises from the involvement of private capital in the development programme of new factories. It seems to us that, particularly in the assisted areas—and that is what we are talking about in general—there is a possibility, if not a probability, that to make schemes attractive to the institutions the corporation will act differently from the way in which it has done in the past. In other words, it might tailor its programme to the sort of preference that institutions want rather than to the employment needs of the assisted areas. This would be different from what has happened in the past. It is something that we should regret, and we should have to show our regret in the normal way.
It seems that a number of changes could occur. First, if one is to deal with private funding on this sort of basis, it must be realised that the more difficult locations are not the ones that will be attractive to private funding. I am not saying that there will not be any, but they will be less attractive to private funding.
Secondly, there has been a trend—one that I hope everyone will welcome, and one that the Minister functioning as the


sponsor of small businesses ought to welcome even more—towards small units of, for example, less than 5,000 sq. ft. From a financial point of view, that is not the most remunerative sort of unit. I believe that the institutions would not want to go as low as 5,000 sq. ft.
Thirdly, if someone is considering the matter from an employment point of view, from the point of view of the good of the assisted area, he will choose his tenants as carefully as possible in line with the employment benefits that will flow. That seems a natural way in which it would be done. However, that is not necessarily the way in which a commercial undertaking would view the matter. It would tend to look to the strength of the covenant rather than to the employment benefit.
In many of the assisted areas the corporation is building well in advance of demand, and obviously there is some purpose in this—it is trying to produce premises that are ready for immediate use. They are often in places where there has not been a market in such accommodation before, so there is no real basis for a commercial letting. That is fine from an employment point of view, but it may not be the most desirable situation for a commercial undertaking.
The kind of assurance that would satisfy me and, I hope, those on my side of the House—I do not want to bind the hon. Gentleman too strongly; just to the Government's view on this and the assurances that they can give—is that the Government are prepared to allow the employment criterion to continue to be the most important factor when they deal with the basis on which industrial premises are to be let.

Mr. Cryer: I should like to make a few remarks before the Minister intervenes and gives us some assurances, because, as my right hon. Friend the Member for Deptford (Mr. Silkin) said, there are matters for concern.
The four amendments go to the root of the clause and seek to clarify the position. The first question is why there appear in line 41 the words
the Corporation may do anything, whether in England or elsewhere".
It is very strange. Is it that the Government, by virtue of having incorporated

the English Industrial Estates Corporation into the Bill and having become aware of the fact that there may be some prime sites within the purview of the corporation, want to give their private partners or, rather, the English Industrial Estates Corporation, access to the multinationals so that they can promote property development anywhere?
If that is so, it negates the whole point and purpose of the corporation. One wonders why this clause is necessary anyhow, and why, in particular, there appear the words
whether in England or elsewhere
which are the subject of one of our amendments. The Minister must have known that the English Industrial Estates Corporation is designed basically to put factories where no one else will put them. I cannot imagine—although I suppose that it is possible—that it has many prime sites. It is conceivable, since it was established in 1934, I think, in Team Valley, Gates head, that over those years what were then low cost sites have now become valuable properties, and that there are the sort of plums to which the Conservative Government want to give their private enterprise friends access.
But even then I should have thought that this was stretching things a bit far, because the whole point and purpose of the corporation is to provide advance factories in England. The SDA and the WDA do it in the other parts of the United Kingdom, so why have this strange phrase in line 41?
The corporation has a very creditable record, in my view and, I am sure, in the view of my right hon. and hon. Friends. It is not the sort of organisation that the private sector is likely to find very beguiling, so why incorporate the provision that the Secretary of State should have the right to give directions for it to become involved in the private sector?
The corporation has had a reasonably adventurous policy of providing nursery accommodation, so-called—small factories for small firms—and it has done this on a highly successful basis. It has done it, for example, in inner city areas—which is a problem that is recognised on both sides of the House. That is where the corporation's efforts and funds


are concentrated—in England, in the areas of greatest deprivation, the SDAs, the DAs and the intermediate areas. It does not build outside those areas. Therefore, why widen its powers in this way?
It is passing strange, unless the Government have some notion of some sort of private enterprise spearhead to develop this sort of factory. I must tell the Government that they are acting under a total illusion, because if private enterprise could have done the job it would have done it in the 1930s. It was the very fact that private enterprise was failing then, as it is failing now, to provide jobs in the areas of greatest unemployment that caused the corporation to be established to fulfil that important need.
The other point that I want to mention is that, once again, one of the amendments requires that the directions that the Secretary of State may give the corporation are to be confirmed by orders laid before both Houses. Conservative Members are shy about bringing forward a proper assessment of public utilities such as the English Industrial Estates Corporation, but I suspect that many of them believe that they have done a reasonable job in the past. By and large, the corporation has provided a higher standard of accommodation and design than the private enterprise sector and it is the only body that promotes a competition for improving the architectural design of factories within a strict cost limit. There is no reason why we should have hideous industrial buildings that people have to work in, live near and see.
I am concerned that the corporation should not be denigrated in any way or shaped in the wrong direction. Therefore, the amendment provides that before directions are given they should be confirmed in this place. That will enable us to keep an eye on the actions of the Secretary of State. I dare say that Conservative Members will say that they have total and utter confidence in the Secretary of State, that he can do what he likes and they will go into the Lobby and vote for him. However, I have sketched out some of the useful things that the corporation carries out and I suggest to the House that it is not a bad principle to have an element of accountability on the Floor of the House. In that

way, all hon. Members—some may have constituency interests—can highlight the danger of a particular direction weakening the thrust and importance of the corporation. It is an area where private enterprise has failed and it will continue to fail unless there is a clearly defined and supported regional policly. The corporation is an important arm of that policy.
If the Minister says that it is only legislation that the Government do not intend using—an argument used on a previous clause—that is that it is only a nominal sort of matter, that the directions will be sparing, that they will occur only in exceptional circumstances, that they will be given only in order to ensure that the corporation fulfils a programme and that the Secretary of State must have these sort of powers, I would say that once legislation is passed in this House it is there and finished. It cannot come back here for modification except by a further Act or Bill. The Secretary of State is able to act on the letter of the legislation that we pass. Whether the matter is trivial or important, the power is in the hands of the Secretary of State.
If it is true that the Secretary of State will use the power only rarely, it will not matter that we have the power of accountability. We will not be troubled with his directions to the corporation and we shall not be kept up for an hour and a half discussing an order. But if there are to be important orders that will seriously alter the character of the corporation in a way that Opposition Members would regard as a possible deterioration of regional policy, we will want to know about that. The Minister should not shy away from that possibility and he should accept that hon. Members have an interest in such important matters. It will not diminish. The level of employment is rising and will get worse rather than better in the regions.
Even the Government have used regional policy as a sort of panacea. When a steelworks closes they say that they will make the area a special development area. When there is a contraction in the mining of coking coal as a result of the closure of a steelworks, the Government say that they will make that area a special development area. The English Industrial Estates Corporation


will be able to work in special development areas and development areas.

1 am

The Government have altered the structure of assisted areas in the regions. The corporation will therefore have an increasingly important role. Its role will not diminish. The Government will have to intervene again and again. They may not like intervening, but we must ensure that that power is available. We do not want the Secretary of State to produce directions that diminish the effectiveness of the corporation.

Our request is reasonable. The Opposition seek accountability. That is part of our philosophy. We should have public accountability. The corporation should be subject to debate in the House. It has carried out a useful and important policy. That policy is rarely debated. These directions provide an opportunity for hon. Members representing assisted areas to bring their knowledge to bear in debate. They should ensure that the Secretary of State's directions to the corporation do not blunt its edge. The corporation must be maintained as an effective unit. The standards of private enterprise must not be allowed to diminish the levels of service that have so far been provided. The Secretary of State's directions must not break the important link with factories and jobs. That link is a vital concomitant of the corporation.

We must not turn the nation into a nation of warehousemen. We must retain our manufacturing capacity. We must therefore retain the link between the corporation and the creation and retention of jobs. I therefore hope that the Government will accept this reasonable and constructive amendment that has been proposed by reasonable and constructive Opposition Members. We do not like the Bill. It is terrible betrayal of the interests of our people. However, we have tried to maintain a constructive and positive attitude. We have tried to preserve some of the standards and services that certain aspects of industrial policy have achieved.

Our guiding light is that the English Industrial Estates Corporation has assisted in providing thousands of jobs as an inducement to business men and

enterprises to move into the regions. For example, in the North-East more people are working in advance factories that have been set up by the corporation than in the whole of the shipbuilding and ship repairing industry. Of course, there has been a shift. However, any worker would be willing to change his job as long as he was given another. He does not want to be rationalised out of existence and put on the dole. That is part of the function of the English Industrial Estates Corporation.

The corporation is a vital arm in the retention of jobs for those in the regions. We therefore need an order to provide for some scrutiny in the House.

Mr. John Evans: Clauses 9 to 12 concern the English Industrial Estates Corporation. In many ways those clauses are the most fascinating in the Bill. If hon. Members care to read the first-class speeches that were made in the Standing Committee they will find much of benefit. They will also find that while we opposed almost every part of the Bill, because of its ridiculous ideological bias, we welcome those clauses.
It is difficult to understand the philosophy of the Secretary of State and his rather strange team at the Department of Industry. On the one hand they are taking an extreme stance in attempting to cut back—in the Prime Minister's phrase—the frontiers of the State in respect of the NEB and the Scottish and Welsh Development Agencies. On the other, in this part of the Bill they are proposing to do what we on the Labour Benches, particularly those of us who are considered more extreme, asked our Government to do for a number of years—create an English development agency. I do not go so far as to suggest that an English development agency is proposed in the Bill, but an embryo development agency is. I imagine that Conservative Members, with their vicious political prejudices, will wonder what the Secretary of State is doing.
Our amendments are extremely reasonable. They would strengthen the clause, which is the main clause dealing with the English Industrial Estates Corporation. They would give hon. Gentlemen the opportunity to consider what the Secretary of State or his successor—I believe that it will be his successor—may do.
I refer hon. Gentlemen to subsection (2):
Subject to directions given under subsection (3) below, the Corporation may do anything, whether in England or elsewhere, which is calculated to facilitate or is conducive or incidental to the discharge of their functions".
The subsection then lists what the corporation may do, all of which we welcome. However, subsection (3) states:
The Secretary of State may give the Corporation general or specific directions and the Corporation shall comply with any such directions.
If a Labour Secretary of State introduced that provision, there would be an almighty howl from the Conservative Opposition. They would suggest that he was taking blanket powers to do almost anything with an organisation, which, as my right hon. Friend the Member for Deptford (Mr. Silkin) and my hon. Friend the Member for Keighley (Mr. Cryer)said, owns a tremendous amount of land and property in England. Indeed I believe that it holds more industrial land in England than any other organisation.
That power will be in the hands of the Secretary of State. It is essential that Parliament has the right from time to time to examine the role, functions and actions of the Secretary of State. Hon. Gentlemen may assume that they will for ever have a Secretary of State for Industry of the calibre of the present incumbent, but I remind them that in the past successive Secretaries of State have not necessarily followed their predecessors' policies. We may even have the night of the long knives sooner rather than later. We must recognise the powers that we are placing in the Secretary of State's hands. Hon. Gentlemen have a right to join with us and perform their parliamentary function to ensure that Parliament looks closely at the proposals.
I should like to know the meaning of the words in subsection (2)
whether in England or elsewhere".
It may be a silly error, and the Under-Secretary may say that he accepts our amendment. I do not know of any function that the English Industrial Estates Corporation has outside England—in other parts of the United Kingdom or in other countries. Why have those words been inserted?
In Committee we ascertained that the role, functions and activities of the

English Industrial Estates Corporation will be confined to the assisted areas. That leads to interesting speculation because there is a vast amount of activity performed by the corporation in areas that are about to lose their assisted area status. There has been no satisfactory answer to date about the holdings of the corporation in such areas.
My hon. Friend the Member for Keighley referred to areas that have lost steelworks and where the corporation has offered factories and work. The steelworks at Irlam, in my constituency, was one of the original closures. That site has been cleared by the BSC and advance factories have been built. We do not know whether anything else will be built on the site or whether any additional work will be provided for the ex-steel workers. I hope that the Minister, when he replies, will tell us what the words
whether in England or elsewhere
mean in that context.
I turn to the other amendments that have been tabled. My right hon. Friend the Member for Deptford referred to inserting the word "industrial" in line 25 of the clause. There is a danger that the corporation could dispose of land at the direction of the Secretary of State for purposes other than that for which it was acquired. If that consideration is linked with amendment No. 20, it has been deemed that planning permission will be granted without reference to the local authority in relation to the English Industrial Estates Corporation, because until the passing of this Bill it has always been regarded as a Crown agency. I am sure that even Conservative Members must have heard much recent criticism of the Crown Agents not requiring planning permission from local authorities.
I hope that the Minister will deal with the matter in a little more depth than he did in Committee, and tell us why the date of passing of the Bill is not acceptable and why it has to be left in the context of March 1981. I have read again the comments of the Minister in reply to our deliberations in Committee, and I do not consider them acceptable or meaningful. The four amendments that we have tabled are extremely reasonable, and are not in any sense ideological.
I apologise for speaking at this hour of the morning. It would have been preferable if more time had been given to the Report stage so that the tremendously important issues could have been dealt with at a more reasonable hour.
It is the duty of Members of Parliament, in examining Bills, to consider the issues logically and sensibly, and to recognise that the Opposition are tabling amendments that are sensible and meaningful. They will strengthen the role of the English Industrial Estates Corporation, strengthen the role of Parliament, and strengthen the role of local authorities in areas that, although they may be blessed with industrial estates provided by the corporation, still feel much trepidation that land that was originally acquired for industrial purposes—often sold by a local authority at fairly generous rates to the corporation—may be disposed of for purposes other than industrial.

Conservative Members must appreciate that the moneys that will be acquired or made available from the sale of assets will not come back to the Exchequer. According to the Under-Secretary's answers in Committee, the moneys acquired by the corporation would be used to further its activities. I welcome that aspect. But one thing that will cause some bitterness is that estates, factories plant and land in non-assisted areas will be disposed of by the corporation and the money will be ploughed back not into those areas but into other areas. I am sure that all hon. Members appreciate that that may cause some friction in future.

I do not oppose the idea that the corporation should dispose of land, plant or factories. It may strengthen the corporation in attracting and maintaining industry in some areas. In the past, assisted areas have suffered from what I call boomlet times. They have not had a boom time since the war. When national or multinational companies were looking for quick expansion it was easy for them to come to the assisted areas and to lease factories from the English Industrial Estates Corporation. For example, a company may lease a factory for five years, the first two or three years being for virtually no rent. It could then

go to the Department of Industry and obtain a 22 per cent. grant for expensive plant to go into the factory. Of course, when the downturn comes after two or three years—sometimes not as long as that—it will surrender its lease.

Some of the more crooked elements within national and multinational corporations have even had the audacity to remove the expensive plant that they acquired with the assistance of the taxpayer and to take it to their headquarters, leaving the assisted area with an empty, sometimes purpose-built factory that is difficult to let to anyone else.

If a firm has capital invested in its factory and plant and for some reason it has to close, because of its vested interest it will be anxious to find a buyer in order to release the capital involved. In that context, it may be that the Secretary of State's proposal will be beneficial to the regions, and therefore I welcome it.

Having said that, I think that the Under-Secretary should tell us what it is about our amendments that he does not accept. He will recall that in Committee we had some interesting discussions on the clause and that we then raised some of these issues. If he will not accept these sensible amendments, he should give us the reasons for his rejection of them. Why will he not accept amendment No. 19, to insert the word "industrial"? Why will he not accept amendment No. 20, to leave out "end of March 1981" and to insert "passing of this Act"? Will he tell us why he cannot accept amendment No. 17? That is a mystery to all of us. If there are reasons why he cannot accept amendment No. 17, perhaps he will tell us in what other parts of the world the corporation is now operating, or where he envisages that it will operate in future.

I apologise for detaining the House. I am sure that Conservative Members are anxious to make speeches, as they were in Standing Committee. I had hoped that we would hear more from them on these amendments. They were extremely reticent in the Standing Committee.

The clause is of fundamental importance, and a complete variation of strategy. If the hon. Member for Hertford and Stevenage (Mr. Wells), by waving his arms from a sedentary position, wishes to intervene, I shall be glad


to give way to him. The hon. Gentleman is apparently not prepared to explain what he means by waving his arms.

It is essential that Members of Parliament, even at this hour of the morning, face up to their duties as parliamentarians and recognise that such enormous powers should not be placed in the hands of the Secretary of State. If Conservative Members are prepared to pass this type of clause they will never again be able to complain about a Labour Government taking powers that some of my hon. Friends have always tried to persuade them to take. If those Conservative Members are not prepared to do their duty and insist that Parliament has a right to scrutinise the actions of the Secretary of State they will have no right to complain in the future.

Mr. Gregor MacKenzie: I shall not detain the House for more than a few moments. I am anxious to know whether the Secretary of State considers that he is wise to insert this clause. I hope that the Under-Secretary of State will explain. To my best knowledge and belief, the only connection between English Industrial Estates Corporation and Scotland occurred during the two years when I was, first, a Parliamentary Secretary, and then Minister of State at the Department of Industry, and sponsored, with my noble Friend in another place, the English industrial estates.
This is not a frivolous matter. Many people in Scotland and Wales might find it offensive. There have been long and heated arguments over the last two years on the question of devolution and the place of Scotland and of Wales within the United Kingdom. From my reading of the Bill it appears that the English Industrial Estates Corporation can come into my part of the world or into Wales and establish an industrial estate. The Scottish Development Agency and the Welsh Development Agency already exist to carry out that job. It would, therefore, be insensitive of the Government if they failed to accept the amendment.
The question of accountability was raised by my hon. Friend the Member for Keighley (Mr. Cryer). The Secretary of State is taking wide powers to himself in this part of the Bill. I do not see why there should be any resistance to the proposal that from lime to time he should

indicate to the House his thinking on the work of the estates corporation, how it should be managed and funded, and what sort of directions it will be given.
It is a large organisation. It is concerned with taxpayers'money—a point that may appeal to Conservative Members. If taxpayers' money is involved, it is only right and proper, irrespective of the side of the House on which hon. Members sit, that we should have some indication from the Secretary of State about what he proposes to do with it. I am bound to say that I do not understand all the clause. Perhaps one is a little dimmer at this hour of the night, but I am a little suspicious of things that I do not understand.
Tomorrow we shall have a debate on regional policy, and over the months that this Government have been in power I have not detected much enthusiasm for regional policy. The English Industrial Estates Corporation has an exceptionally important part to play in the whole question of regional policy. It has a part to play in attracting new industries from abroad and from other parts of the country.
There are hon. Members on both sides who have been very genuinely concerned about industrial estates factories lying vacant for some time. In many such instances plots of land are built on because of various restraints exerted over a period. These amendments give us the opportunity to ask the Minister how he sees the role of the corporation over the next few years. Does he want it to fulfil an expensive role, as it has in the past? Does he propose to allow it to have land banks which are exceptionally important at this time? This is an important arm of regional policy, and we would all be indebted to the Minister if he would explain the position.

Mr. David Mitchell: The right hon. Member for Deptford (Mr. Silkin) asked me whether I would state in English what is meant by the words
whether England or elsewhere
in relation to amendment No. 17. If the amendment were passed it would stop the corporation from being able to conduct any of its business, such as buying bricks, in Scotland or in Wales. It would stop it from being able to negotiate the


purchase of land with a non-English landlord who had land in England but happened to reside outside England.

Mr. John Silkin: Suppose that the Under-Secretary were to devote his mind to omitting all the words
whether England or elsewhere
would that not have exactly the same effect?

Mr. Mitchell: My understanding is that it is necessary to have this in the Bill for the reason that I have just stated. I pray in aid the right hon. Member for Rutherglen (Mr. Mackenzie) because he, too, was puzzled by this, but he will recall from his period as the Minister of State, Scottish Office, that under the Scottish Development Agency Act 1975, which his predecessor put on the statute book, exactly the same phraseology occurs. I quote from Section 2(3):
The Agency may do anything, whether in Scotland or elsewhere, which is calculated to facilitate…
I hope that the right hon. Gentleman will feel that I have followed precedent correctly in this matter.

Mr. Gregor MacKenzie: We have always had a missionary role in Scotland.

Mr. Mitchell: Amendment No. 20 deals with removing "end of March 1981" and inserting instead "passing of this Act".
If this amendment were carried it would mean that all development that was about to start when the Act became law would be held up until it had received planning consent, instead of being able to work on deemed planning consent which it otherwise could have done. I am certain that that would not be the desire of any hon. Member, because it would have a serious effect on the corporation building programme.

Amendment No. 18 provides for directions to be confirmed by orders laid before both Houses of Parliament. We are largely able to meet this request by undertaking to place copies of the guidelines which are not statutory in the Libraries of the House of Commons and the House of Lords.

I turn to the major points raised by the right hon. Member for Deptford. He

asked me for assurances that in bringing in private funding there would be no change in the activities carried out by the corporation. I can give the right hon. Gentleman and the House a categoric assurance that there is no intention of making changes of that sort.

I believe that the right hon. Gentleman is worried that the corporation may move into commercial activities. I remind the House that it already has banks and a post office at Team Valley, which are an essential part of the services provided in such large estates. There are no plans to encourage the corporation to venture into commercial property development, but we do not rule out the odd occasional need to provide accommodation for essential commercial services on large estates, similarly to the way in which that has been done in the past.

The right hon. Gentleman drew our attention to the problems associated with the provision of smaller premises. He said that premises of 5,000 sq. ft. are less commercially attractive than larger units. Rightly, he put his finger on the fact that premises of 2,000 sq. ft. and less, which are ideal for workshops and the like, are not normally considered to be commercially attractive. There is now so much demand for that type of accommodation that it has become commercially attractive, but in general the developers have not recognised it.

The right hon. Gentleman appears to be slightly uneasy and uncertain about that. The National Coal Board pension fund has built a number of blocks. It does not build one isolated 5,000 sq. ft. unit. It builds a block of 20, and then puts up the divisions inside. That brings the cost down. It finds that when it is halfway through building there is a queue of people wanting to take possession. We are so concerned that there is an unsatisfied demand for small premises of this sort that we have commissioned Coopers and Lybrand, in the City, to give an assessment of supply and demand. We believe that that will show that there is a substantial unsatisfied demand, and it will be a major opportunity of encouraging the private sector to build.

There is possibly some role for local authorities in the depressed area to which the right hon. Gentleman drew attention to take a head lease and provide a covenant so that the premises become attractive


to a private developer. He would not have to deal with the administration and the possibility of lack of tenants at some stage.

Mr. Cryer: The hon. Gentleman says that the Department is commissioning Coopers and Lybrand to establish supply and demand. He admits that the private sector has not recognised the growth in the market, and that the industry is commissioning a company to measure that growth. Who is to pay for that growth? Will there be a charge to the private developer, or is this simply a subsidised service to private enterprise?

Mr. Mitchell: It is not a service to private enterprise. It is part of our role, as a Department, to study the needs of the smaller business sector and we are having a survey carried out to determine whether our assumption and all the anecdotal evidence that there is an acute shortage of small business and workshop premises are correct. I expect to have the results of the survey by the end of the month.
I agree with the right hon. Member for Deptford that there is now a widespread recognition that if we are to see many more businesses starting they will need small premises and we must make sure that there is no hold up there.
I can also give the right hon. Gentleman the other assurance for which he asked, namely, that employment will still be the most important criterion to which our building and letting programmes will be geared. I hope that as I have met the cases raised by Labour Members the right hon. Gentleman will ask leave to withdraw the amendment.

Mr. John Silkin: I am grateful to the Under-Secretary. As we are about halfway through, I feel that some gesture is required from this side. In view of the hon. Gentleman's assurances, I shall not press the amendments, but I suggest that, perhaps while one of the Under-Secretary's hon. Friends is dealing with other amendments, the Under-Secretary should say to himself:
Subject to directions given under subsection (3) below, the Corporation may do anything…which is calculated to facilitate
and then say:
may do anything, whether in England or elsewhere, which is calculated to facilitate
and try to work out the difference.
I beg to ask leave to withdraw the amendment.

Amendment, by leave, withdrawn.

Motion made, and Question proposed, That further consideration of the Bill be now adjourned.—[Mr. Mather.]

Mr. John Silkin: This is a debatable motion. I said a moment ago that we had gone halfway. There is a little more that we should do before we adjourn. Let us see whether we cannot dispose of, say, another three clauses and start tomorrow with clause 13.

Question, That further consideration of the Bill be now adjourned, put and agreed to.

Bill, not amended (in the Standing Committee),to be further considered this day.

LYBSTER HARBOUR, CAITHNESS

Motion made, and Question proposed. That this House do now adjourn.—[Mr. Mather.]

Mr. Robert Maclennan: The fishing industry in Scotland faces many uncertainties. The cruel inflation of costs and the particular and justified anxiety about the impact on pier head prices brought about by uncontrolled imports has led to a mood of concern and of growing hope that the Government will intervene to restore stability and the prospect that prices will be adequate to the needs of the industry.
My purpose in this debate is to highlight the problem of a particular fishing community and remove an uncertainty with which it lies within the power of the Government to deal. The problem is the condition of the pier at the harbour of Lybster, in Caithness.
The problem that faces the fishing community in Lybster is acute, and not new. The present pier was constructed in 1950 and was expected to last only 25 years. It is now coming to the end of its natural life. The structure, of limited strength, was built with sheet piles, which are now seriously corroded, and the top of the jetty is rotting. What has been a haven for an important local fleet is threatened by the imminent collapse of the pier. That collapse could occur at any time.
The harbour trust, a private friendly society, approached the Department of Agriculture and Fisheries for Scotland some time ago to seek assistance for a scheme to improve the pier and jetty facilities, which are essential for the provision of shelter and without which the fishing activity based on Lybster could not continue. The trust received a negative response from the Department.
I do not criticise, but I genuinely seek the Minister's help and advice on how to save this important fishing endeavour for the benefit not only of the fishermen but of the whole community in the parish of Latheron, which depends upon the prosperity of the fishing activity.
The record at the port, particularly in the past few years, is encouraging. It shows a remarkably steady growth in activity. The value of fish landings has increased each year. In 1976 the landings were worth £109,840; in 1977 they were worth £202,505; in 1978 they were worth £141,990; and last year, 1979, they were worth £299,800, of which £90,000 was due to a new scallop fishing industry.
The growth in the number of small boats using Lybster harbour has also been encouraging. About 15 local boats fish from the base, including two seine net vessels—"Restless Wave" and "Silver Cloud". A third vessel in the vicinity—the "Amethyst"—uses the haven, which is also used by other vessels. Few havens can be used by such vessels on the East Coast between Cromarty and Orkney.
The harbour trust's resources are limited. It has a modest income from harbour dues and the 2 per cent. value of landings paid by fishermen. The trust has spent almost all its income on running repairs. Clearly the harbour cannot face the cost of a major scheme of the type needed to save it. I ask for the Minister's help.
The east jetty is only 8feet wide and there is no room for vehicles to turn or come on to it. The trust has proposed that it should be widened to enable vehicles to go on to the hard-standing by widening the top to 16 feet. It suggests that the jetty should be pile-driven and concrete-filled, so that it can carry a crane to continue dredging and deepening the water around the jetty. The principal

purpose of the jetty is to provide a safe haven and a landing for the fish.
I have said that the Department has so far proved rather negative in its response to my approach and that of the harbour trust. On 16 May last year the Department indicated in a letter to the secretary of the harbour trust that it would not be possible to make available funds of the amount that the trust was seeking. In the light of that letter I thought it right to pursue, with the other agencies with financial resources, the possiblity of seeking help elsewhere.
I first raised the matter with the Scottish Development Agency, but Sir William Gray, the then chairman, told me that there was little that the agency could do. In a letter to me of 7 September last year he said that because the harbour was in private ownership and was operating as a commercial venture the agency was precluded by its guidelines from offering assistance under its environmental programme.
Is it the Minister's understanding that the agency is so precluded from assisting the scheme? It seems to me that the benefits of the improvements that are sought would go beyond the assistance of the fishing industry alone. There is some tourist benefit to be gained, and some environmental benefit, if one conceives that in wide terms. But it may be that Sir William's appraisal was right, and that the agency is precluded from assisting.
I have also approached the Highlands and Islands Development Board, whose chairman has expressed great interest in, and concern about, the predicament that the trust faces. The board's engineers have examined the trust's proposals and have confirmed in large measure the expense of the operation and the difficulty of meeting the full bill.
However, in a letter to me of 26 June 1979, the chairman, Sir Kenneth Alexander, said:
It would indeed be very unfortunate if this independent and vigorous harbour society were to be forced into a position where they could not carry out these repairs, and it would appear from the figures of fish landings given to us by Mrs Sinclair
—the trust's secretary—
that there has been a substantial increase in the volume and value of fish landed.
The board's view appears to be that the scheme is too large for it to fund out


of its own resources, save possibly with assistance under section 8 of its parent Act, which provides for assistance by way of grant and loan, if it can be shown that the trust is in a position to service a loan. Notwithstanding the growth in value of the landings, which has been marked over the past few years, there must be some doubt whether the trust would be in a position to finance a substantial loan charge. There remains the question whether it would be possible for the trust, with Government support, to approach the European Community for assistance—whether through the regional development fund or through the guidance section of FEOGA. I understand—though, of course, the scheme is not operative now—that resources of up to about 25 per cent. of the total capital cost might be made available through FEOGA to assist a fisheries harbour of this kind. Community funds were obtained for the not dissimilar needs of the harbour at John o' Groats, in Caithness, under the regional development fund, following a visit to Caithness by Commissioner George Thomson, as he then was.
I understand the difficulty faced by the Department and the Government when asked to fund a development of this kind. A number of harbours around our coasts are in need of attention, and I recognise that there are competing claims upon the limited resources. Nevertheless, I think that the Government will realise the importance of this harbour to the whole East Coast of Caithness. Indeed, it is important to fishermen fishing out of Helmsdale and points further south. The harbour plays a key part in the life of that community, which in some ways is suffering from both underemployment and emigration. There is no way in which it could sustain the shock of the collapse of this harbour and this fishing activity. It is because of the seriousness of the situation for the local community that I think it right to raise this matter in Parliament.
A number of small developments have taken place, under a number of different schemes, in harbours around the coasts of my constituency—at Caithness, at Dwarwick Head, at Phillips harbour and at John o' Groats. Some of these projects have been carried out under job creation

schemes, some under European Community regional fund schemes, and so on. I think that it cannot be beyond the ingenuity of the Government to give a lead in the resolution of this difficulty. I believe that the time has come to stop passing the problem from agency to agency and to place the matter squarely in the Minister's lap to try to resolve what I think he will acknowledge is a genuine problem, and a genuinely important problem for the development needs of the community.
I hope that the Minister will not feel it right to pray in aid the sort of attitude which, I am afraid, has from time to time characterised some of the thinking of the Scottish Office on fisheries harbours. One can accept that limited funds lead to the need for priorities and queues, but what is not acceptable is to suggest that there is an alternative harbour that could be used in place of Lybster.
I remember that about a decade ago there was an argument—also affecting my constituency—about the competing claims of two harbours on the West Coast. The Scottish Office at that time was disposed to favour the claims of Lochinver over those of Kinlochbervie and to advise that the fishing could be conducted as well out of one port as out of the other. I did not believe that that was a wise view, and when the Scottish Office was prevailed upon to encourage the development of Kinlochbervie the wisdom of that was seen by the growth of local activity; not merely by the survival of the community, but by its development.
I believe that the Scottish Office should take a positive and encouraging view towards the development of Lybster harbour, because in its development lies the prospect of a revived community, and one with growing fishing activity near to the waters that are so fruitful. The fishermen are deeply worried about the collapse of this pier. I spoke to their chairman, and to the chairman of the harbour trust, Mr. George Carter, only last night, and he re-emphasised how seriously they view the situation. I know that the local regional councillor will be meeting officials of the Department of Agriculture and Fisheries this week to reinforce the point that I am making and to seek the help of the Government. I hope that our pleas will not go unanswered.

The Under-Secretary of State for Scotland (Mr. Malcolm Rifkind): I listened with great interest to the remarks of the hon. Member for Caithness and Sutherland (Mr. Maclennan). Clearly, one recognises his genuine concern for the interests of this small harbour community in Lybster, in his constituency. I would not in any way dissent from the points that he has made about the state of the east jetty in the harbour. Clearly, that is not a matter that is in dispute. The only matter that is a cause of concern is whether, within the context of the funds that are available to the Scottish Office at present, this project, which inevitably would be expensive, is one that is deserving of the priority that would enable funds to be made available for it.
As the hon. Member will be aware, the Scottish Office is able, under the Fisheries Act 1955, to make grants and loans available for harbour purposes. Over the last five years, some £3 million has been made available in grants and some £700,000 in loans. The estimate for 1980–81 is that £1,150,000 will be available for grants and about £275,000 for loans. That is a significant amount. But when one takes into account the many demands and requirements of the harbours, both throughout the hon. Member's constituency and elsewhere in Scotland, it is clear that there have to be major priorities. Indeed, the hon. Gentleman will remember that the previous Administration, who were also approached on this matter, felt unable to give the sort of assistance that he hoped to obtain.

Mr. Maclennan: I think that the Minister will acknowledge that the previous Administration certainly did not give a final negative to the harbour trust in this matter. Although the position was not very encouraging, my impression was that at least it was still under negotiation.

Mr. Rifkind: I would not dissent from that comment. It was a discouraging response, for very much the same sorts of reasons that unfortunately still seem to be relevant to the whole issue.
Clearly, Lybster is a very useful harbour, but it is very small—which I think the hon. Member would be the first to accept. I was interested to hear him say that he understood that 15 boats regularly used Lybster as their main base.

My own information is that it is only seven boats—five under 40 ft. and only two larger boats. This is a matter that should be easy to check. It is certainly something that I shall have investigated in order that it can be clarified.
The hon. Member also spoke of the increase in the landings at the harbour. He referred to the landings of scallop over the last year. I understand, however, that this is not likely to be a recurrent theme, as the scallop beds have to be replenished, and this could naturally have an effect on landings over the next few years.
The east jetty, as the hon. Member indicated, was constructed in 1950, at the remarkably low cost of only £15,000, with the 95 per cent. grant and loan assistance from the Scottish Office. I agree entirely with the hon. Member's comments about the condition of the jetty. Indeed, there is no disagreement about the engineering desirability of carrying out substantial work on the jetty. It is recognised to be in poor shape, as the hon. Member indicated.
The difficulty is essentially one of cost. The harbour society's own engineers estimated about two years ago that their proposals would cost about £150,000, plus about £30,000 in fees. The Highlands and Islands Development Board's assessment last year was that a figure of between £275,000 and £300,000 would be more realistic. That, of course, was last year's figure.
These are clearly substantial figures, and it would be necessary to justify giving this project a very high degree of priority, given the limited overall funds that are available to the Department.
The hon. Member said that he was concerned that no argument should be put forward about alternative harbours. I must point out to him that the harbour at Wick, which is about 15 miles away, is already used, I understand, by at least two boats from Lybster, which use the Wick harbour on a regular basis. Therefore, I think that this cannot be considered to be an entirely irrelevant factor to take into account.
The Highlands and Islands Development Board has a wide social role and operates a grant and loan scheme under which certain harbour works can qualify. The board's policy is, however, to place


emphasis on loans rather than grants. As the hon. Gentleman has indicated, it feels unable to help because the society, with the very low revenue that it has, would be unable to serve the sort of loans that might otherwise be made available to it. In the circumstances, the board, while also agreeing that the work on the jetty is desirable in principle, now feel that it has exhausted all possibilities of funding the proposed rehabilitation works.
The hon. Gentleman asked me whether the SDA was correct to say that it was precluded from assisting. I cannot give him an answer this evening on that point but I will have it looked into and ensure that he is informed on the matter. Likewise, I shall look into the question whether FEOGA might still be able to make any form of assistance.
We have given careful consideration to the question of the European regional development fund. Clearly, that would be an attractive solution from every possible point of view. It would appear that assistance under the fund is unlikely to be obtained from that source. The emphasis that is placed by the relevant EEC regulation on a project's contribution to the general economic development of the area in which it is located makes it most unlikely that a project in a small fishing harbour would be a successful candidate, particularly where this involves the replacement of an existing facility. It would have to be demonstrated to the EEC Commission that the scheme was of strategic importance to the fishing industry as a whole or that it would generate a substantially higher level of economic activity in the area.
The hon. Gentleman referred to the grant made available by the EEC to John o'Groats harbour. In that case, it was possible to fulfil the stringent criteria laid down for applications under the fund. The Scottish Office would find it impossible to justify an application under these criteria for the present scheme.
The hon. Gentleman said that one reason why the extension of the pier was required was to assist in the further dredging of the entrance channel to the harbour. As we indicated to the harbour society in May 1977, the experts in the Scottish Office believe that in addition to the loose rock there is a section in the approach channel to the harbour extending a distance of approximately 30 yards,

where the bed level is at least as high as the entrance to the harbour. This, together with the known spines of rock within the area being dredged means that continuation of the harbour society's work will not be effective. Further major capital expenditure would be necessary to solve the problem.
The hon. Gentleman may feel that we are adopting an unduly negative approach which will create problems for the harbour society and the fishermen based in Lybster. It may be that the society will have reluctantly to accept that the harbour is more suitable for small boats and larger boats should use the harbour at Wick, which is already used by certain boats based in Lybster. I recognise that they may be reluctant to do that but it may be that no alternative is available.
A second possibility is for the harbour society, with its engineering advisers, to re-examine the proposal to see whether it will be possible to effect a useful improvement to the harbour at less cost. We are not optimistic about that being likely to produce a useful conclusion but it may be worth considering. However, if it were possible, we would be prepared, without commitment, to reconsider the question of grant assistance within the financial constraints under which we must operate.

Mr. Maclennan: The development board has already considered that suggestion and shares the Minister's view that it is not likely to prove fruitful. Will the Minister undertake that his engineers will participate with the harbour society in such an examination?

Mr. Rifkind: If the society considered that a modest operation at less cost, although a second-best solution, would be worth proceeding with, we would do our best to give any co-operation towards assessing whether or not that is a realistic consideration.
A third possibility would be for the society to approach the Highland regional council about the possible transfer of the harbour to the council. I could not, however, predict the local authority reaction, since while the council has powers to acquire harbours, they, too, are under financial constraint, just as the Government are.
We seek in no way to minimise the problems that the condition of the pier


will produce in the Lybster area. Unfortunately, we have limited funds available, and because of the small nature of the harbour it is difficult to justify the huge sums that would have to be considered. However, a new approach of a more modest nature will be given full con-

sideration and we hope to be able to provide some form of help, if such an approach proves possible.

Question put and agreed to.

Adjourned accordingly at ten minutes past Two o'clock.